| Turnover | £265m | | Profit per equity partner | £808,000 | | Equity spread | £365,000-£855,000 | | Net profit | £92.9m | | Profit margin | 35 per cent | | Revenue per lawyer | £332,000 | | Revenue per partner | £1,305,000 | | Revenue per equity partner | £2,304,000 | | Total no of fee-earners | 1,070 | | Total no of assistants | 595 | | No of partners | 203 | | No of equity partners | 115 | | Total no of female partners | 26 | | Total no of female equity partners | 11 | | Total no of staff | 1,855 | | Leverage ratio (equity partners/fee-earners) | 5.2 | | Representative clients | British American Tobacco
Credit Suisse
TXU
Hammerson
JPMorgan
Royal & SunAlliance
BSkyB
British Airport Authority
Lazard
Virgin
Time Warner | |
After a slow start, Herbert Smith reported strong
growth in both turnover and profit in 2004-05.
The City firm posted a 9 per cent rise in gross
fees to £265m, while average PEP jumped by an
impressive 15 per cent, from £700,000 to £808,000.
Partners at the bottom of equity pocketed a
respectable £355,000, while those at the top of the
lockstep saw their drawings rise to an impressive
£855,000. However, it is worth noting that Herbert
Smith's equity is reasonably tightly held, with only
115 partners out of 203 (56.5 per cent) ranking as
full equity partners.
Herbert Smith's alliance with Germany's Gleiss
Lutz and Netherlands firm Stibbe, and its referral
relationships in the US with the likes of Cravath
Swaine & Moore, Simpson Thacher & Bartlett and
Paul Weiss Rifkind & Wharton & Garrison, means
the firm has avoided expensive overseas investment.
Indeed, Herbert Smith's minimalist international
strategy means the vast majority of the firm's revenues
(82.3 per cent, or £218m) are generated from
London. Asia, which generates 11.3 per cent
(£29.9m) of the firm's turnover is the largest revenue
contributor outside the City. Meanwhile, 6.4
per cent (£16.9m) emanates from the firm's European
arm.
Herbert Smith's corporate practice dominated
the financial year, contributing almost 41 per cent
of global turnover. Billing in the 95-partner department
increased by 17.7 per cent, from £92.3m to
£108.6, thanks to deals such as the sale of Saga and
the launch of the Nuclear Decommissioning Authority,
for which the firm billed the Department of
Trade and Industry an estimated £10m.
The corporate department's success in 2004-05
has followed through into the current financial
year, with the firm securing a number of high-profile
mandates, including acting for new client For-tune Brands on its participation in Pernod Ricard's
successful bid for Allied Domecq.
Litigation also performed well, bringing in
£106m, representing 40 per cent of the firm's overall
turnover. But although in real terms litigation
turnover has increased, this figure represents a slight
drop in the department's overall contribution to
turnover.
Real estate, which posted a 4 per cent rise in
turnover, from £26.7m in 2003-04 to £27.8m last
year, has continued to retain its position among
the most profitable UK real estate practices, with
revenue per partner topping £1.6m annually.
However, the finance practice, which turns over
just 8.5 per cent of Herbert Smith's firmwide revenues,
is still lagging well behind corporate and litigation.
David Gold, who took over as senior partner in
April 2005, has unsurprisingly made growing Herbert
Smith's finance practice one of his main priorities.
Indeed, the firm is hoping to increase finance
to 20 per cent of its global turnover within five
years.
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