Revenue up in H1 as firms shake off downturn blues
Berwin Leighton Paisner (BLP) has had by far the most successful first six months of 2010-11 of the 17 firms to have reported first-half results.
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The firm has reported a turnover of £103m, which is a 30 per cent increase on the £79m it took in during the same period of 2009-10. Last year’s half-year figure represented a 5 per cent drop.
According to managing partner Neville Eisenberg, the reversal in fortunes can be put down to a number of measures coming to fruition.
“We made a series of investments in the recession that have started to pay off,” he says. “We’ve been pretty confident for a while now that our lateral hiring strategy works, alongside our work in emerging markets and raising the firm profile.”
Other firms to have recorded double-digit rises include DWF, Stephenson Harwood, Watson Farley & Williams and Wragge & Co.
“The bottom line is that we’re a cyclical business for two reasons,” says Wragges senior partner Quentin Poole, whose firm grew by 15 per cent over the period. “We’re quite heavy on real estate, which is 30 per cent of our business, and we’re heavy on very large corporates.
“That’s bad news for us in the downturn, but in the upturn it’s good. [In addition, a fifth] of our practice is public sector. The big question is what the long-term impact of the Comprehensive Spending Review will be [on that area].”
However, Poole is aiming for 15 per cent growth at the full-year, which would take total turnover up from the £96m it made in 2009-10 to around £110m. He admits that half of the extra £7.5m it brought in at the half-year is a result of the firm having acquired a team in Paris.
David Jabbari, chief executive officer at BLG, is similarly candid about the impact of acquisitions on his firm’s 17 per cent revenue rise, which is around the rate of growth the firm wants to post at the full-year.
BLG brought in £44.5m for the first six months, up from the previous year’s half-year figure of £38m. In the summer it took on the insurance team of failed firm Halliwells, including 17 partners and an additional 80 fee-earners (The Lawyer, 21 July).
Jabbari confirms that the additional turnover “made a big difference”. However, he emphasises that the £6.5m hike was “not entirely down to Halliwells - we were at least £1m-£2m up anyway”.
He is critical of the lack of transparency on reporting in the market. “[We often] have firms reporting ridiculously high turnover figures when they’ve been on the acquisition trail,” he says. “I don’t know how people have got to [such substantial] growth figures in some of the firms I’ve seen.”
Five firms in the top 10 have reported their rates of growth. The other five (Clifford Chance, Freshfields Bruckhaus Deringer, Hogan Lovells, Linklaters and Slaughter and May) have refused to do so. Allen & Overy, DLA Piper, Herbert Smith and Norton Rose each grew by between 3 and 9 per cent. For all except Herbert Smith, extensive international networks made significant contributions.
Herbert Smith is now focusing on increasing the international side of its business, which currently generates around 30 per cent of total revenue.
Only one firm in the top 10 saw a fall in revenue. Eversheds’ revenue fell by 3 per cent, from £178m to 172.6m.
In a statement Eversheds chief executive Bryan Hughes blames “market conditions” and “pricing conditions”, but affirms faith in the firm’s business model.
“With market conditions still uncertain, many sectors remain cautious at best and pricing tensions remain,” he states.
