Shoosmiths posted its second major profit increase in two years. PEP rose 47 per cent to £342,000, representing a 250 per cent profit increase over the last 24 months. This was achieved at the same time as partner numbers grew 5 per cent to 73. The firm also posted a major turnover rise, with revenues hitting £60.8m, up 11 per cent from 2003- 04's £54.6m. This year the firm has budgeted for turnover of £70m, with PEP remaining stable.

The results are a fillip for chief executive Paul Stothard, who took the reins three years ago. Immediately, Stothard introduced a wave of financial management reforms to boost profitability. He scrapped the remuneration system, which, according to Stothard, "wasn't widely understood", in favour of a more transparent five-year modified lockstep. An elected committee determines partners' merit-based bonuses according to four bands. 2004-05 also saw the firm embark on significant lateral hires, including Blake Lapthorn Linnell's corporate star Sean Wright and Eversheds property partner Simon Boss.

The volume business, including Property Direct and its personal injury operation Legal Expenses Division (LED) contributed significantly to turnover, with LED accounting for around a quarter of revenue and Property Direct for around 10 per cent.

Litigation accounts for 51.8 per cent of turnover, property 29.4 per cent and corporate 14 per cent.