News Law firms UK top 30: revenues shrink by half a billion as PEP rebounds By The Lawyer 11 July 2010 00:00 17 December 2015 16:10 Two-thirds of top 30 see increase in PEP; total revenue down 4.5 per cent; Clifford Chance regains top spot Scep Tick 12 July 2010 at 09:11 So, turnover goes down but PEP goes up? In other words all those waves of redundancy led by the partners who could not get the business in was to the benefit of those very same, self-evidently incompetent partners. One upon a time law was a profession. Now it is the preserve of a venal, disgraceful, pathetic oligarchy who have scrambled up the stepladder before kicking it away. I wonder how many good lawyers will walk away from the law as a direct result. In 20 years’ time we might be seeing a crisis of intelligence. Unfortunately, the current partners will not care, as they will have made their stash. Reply Link Anonymous 12 July 2010 at 10:01 Merger with Proskauer can’t come quickly enough for SJ Berwin. Reply Link Anonymous 12 July 2010 at 10:30 @ Scep Tick Tough times to deal with personally for many – but since when has it been an unacceptable objective for any business to seek to improve profits & shareholder return? And, no, I’m not a partner. Reply Link Anonymous 12 July 2010 at 10:35 One upon a time law was a profession. Now it is the preserve of a venal, disgraceful, pathetic oligarchy who have scrambled up the stepladder before kicking it away ———————————————- Agreed, City law is now deeply unpleasant and solely money driven (as evidenced by tables like the one above). Many associates have lost their jobs, and in many cases their homes and even careers, to protect the salaries of those taking home ten times as much. In an industry like car manufacturing, where profit margins are 5% or less in even good times, redundancies in bad times are a matter of survival and necessity. In City law firms, redundancies in bad times are a matter of GREED. The manner of many of those redundancies has been even more despicable, with good lawyers being pushed out in the most unpleasant manner through untrue appraisals, bullying and all manner of other ‘stealth’ techniques. Reply Link Anonymous 12 July 2010 at 11:04 How did you estimate the figures for Slaughters? If yours are indeed accurate that is slightly shocking news. Reply Link What's gone wrong 12 July 2010 at 11:36 Who are these guys making that much money? Most of the firms are so downsized it’s pygmies on the shoulders of pygmies. In the scenarios of the Texas Chainsaw Massacre meets the Black Hole of Calcutta (can you say that?) do those chaps have any strategy other than “fill my boots?” Reply Link Howard 12 July 2010 at 16:16 Re-Anonymous | 12-Jul-2010 10:35 am Quite agree. What does this show us? Since when has turnover been a sign of quality or client service? Some of the best firms I have had the pleasure of dealing with in my 30 or so years in business – and they are top notch – wouldn’t even feature in this list because they don’t have this primitive obsession with size. This legal journal admittedly does report on variables beyond revenue and profitability but the mindset within the City firms is too entrenched. Reply Link Joe 12 July 2010 at 16:18 I’m surprised to see a 13pc drop at Slaughters – biggest dip in the top 10. Not enough banks going under to keep them busy any more? Reply Link HGRd 12 July 2010 at 16:18 Amusing how far the disappearance of deference has travelled into the legal profession. One only has to read the above to see how lower calibre mediocrities routinely try to pwn their betters. Nonetheless, partners, you are rumbled! email@example.com Reply Link Anonymous 12 July 2010 at 16:19 If my firm reports PEP down, the legal press claim we’re struggling. But I suspect that our PEP will be down, because we’ve tried to hang onto our staff. It’s the right thing to do, but not the way to absolutely maximise profits to the hilt. Reply Link Tim Russell 12 July 2010 at 16:32 Here is a simple if rhetorical question. How many partners in the one of the bigger firms would truly say that they enjoy their jobs and would recommend the law as a career , to the next generation . It might be very different if there was not the same ” peer” pressure , amongst the top firms , to constantly increase profitability at the expense of a fullfilling life at and away from work. And as the gap between London and the provinces grows wider the profession becomes more divided. I guess the cardiologists and ex wives ( with apologies to the many successful women partners but you know what i mean ) will be happy. Reply Link Anonymous 12 July 2010 at 16:39 The City model works very well for the few, but what about the salaried partner who sees the prospect of equity receding into the distance, or how about the senior associate in the same position? All too often these guys are not being fairly rewarded, on the contrary they are working increasingly hard and under growing pressure. For these guys therefore the City model is broken, they’d be much better speaking to firms that offer performance related pay, such as Keystone Law or Cramer Pelmont. Not only would they increase their revenues and job security, but they would also get their lives back! Reply Link City Gent 12 July 2010 at 17:01 Perhaps the reason that Slaughters’ PEP is down so much is that they behaved like gentlemen and retained staff even though they weren’t fully employed, unlike the money-grubbing partners in many of the other firms mentioned, who chose to sacrifice loyal staff to line their own greasy pockets. These are not professional people in any real sense of the word. They are just hucksters who happen to practise law as a lucrative trade, and they would be just as happy managing a brothel if the money was right. “What shall it profit a man if he gain the whole world but suffer the loss of his own soul?” Reply Link amused 13 July 2010 at 09:41 so called gentlemen rarely are, City Gent. Even the most cursory knowledge of the interior workings of “Slaughters” would rebut your assertions. Reply Link Bleeding Heart 13 July 2010 at 15:52 As some have pointed out already here, PEP isn’t the be all and end all when it comes to judging a firm’s performance, especially when it can go up and down as much as we’ve seen over the last few years. Some of the firms that I would say have been most stable and best run are down this year in pure profit terms. But it doesn’t suddenly make them bad firms. Nor does a 28pc rise make Eversheds THE place to work. You’d think people so well versed in the ways of the City would be able to see through these numbers. But then, maybe the last few years has taught us that they may not be the Masters of the Universe after all… Reply Link Britomart 13 July 2010 at 15:58 Everyone knows PEP is an artificial concept, but no more artificial than any other yardstick businesses use. You only have to talk to MC lawyers for half an hour to see that PEP is in their DNA, and they’re hardly gonna change when it’s all about money in their own pockets Reply Link Anonymous 13 July 2010 at 16:30 A column should be added to the main table showing how many redundancies have been made in the last two years. Then we can clearly see the firms whose PEP rises are due to redundancies rather than revenue increases or cost-cutting. Reply Link Anonymous 13 July 2010 at 18:38 Problem is Anonymous 4.30pm there is a big difference between announced redundancies and the hundreds who have been ‘managed out’ on the quiet. Maybe when the LLP accounts are actually published The Lawyer should make a comparison between the number of fee earners at these firms in 2008, 2009 and 2010 and try and find out the true scale of departures, I suspect many of the so-called announced redundancy numbers will bear no comparisons to the numbers pushed out. Reply Link Ashley Balls 14 July 2010 at 06:55 Here we go again. Revenue/fees down (in response to client demand) and cost cutting results. When that process is complete what then? Leaner, meaner law firms – probably not; more likely fewer partners, a longer run to partnership (if ever for many) squeezed margins, outsourcing, insourcing, whilst stuck with ever rising property and wage costs. In similar circumstances new business models would start to emerge. What is the likelihood in legal services? To date the only change has seen the advent of the virtual firm which is only a stripped down ‘old’ law firm. Surely there are some new ideas out there. Reply Link Scep Tick 14 July 2010 at 14:16 “@ Scep Tick Tough times to deal with personally for many – but since when has it been an unacceptable objective for any business to seek to improve profits & shareholder return? And, no, I’m not a partner.” Any idiot can make a short-term gain by cutting costs. Doubtless any law firm could make a whopping great PEP by selling city centre offices and moving to Benbecula. It does not make it good management; it does not mean that it is in the owners’ long-term interests. Unfortunately law firm owners do not HAVE long-term interests, it seems… Reply Link honey G rider 15 July 2010 at 08:46 You cannot apply ‘rational actor’ and ‘efficient market’ theories to law firm when they are full of some of the most irrational, inefficient imposters in the market… Reply Link Name Email Cancel reply Threaded commenting powered by interconnect/it code.