Watson Farley sees PEP drop by 13 per cent to £388k

Watson Farley & Williams has seen a 13 per cent fall in average profit per equity partner (PEP), despite reporting a 2 per cent increase in turnover for 2012/2013.

The firm’s turnover for the 2012/2013 financial year stood at £102.1m, up 2 per cent on 2011/12’s £99.9m. Its revenue growth rate has slowed compared to the previous year, which saw a 12 per cent hike on 2010/11’s £88.8m.

The firm’s top of equity fell from £1.5m in 2011/12 to £980,000 last year – a 35 per cent decline – with the bottom of equity dropping by 13 per cent, from £220,000 to £190,000.

Watson Farley’s PEP for 2012/13 fell by 13 per cent compared to the previous year, while its net profit declined by the same margin. The fall follows a decline in profit in 2011/12, when PEP fell to £446,000 from £458,000 in 2010/11.

Although revenue growth has slowed, the firm’s staff and lawyer headcount continued to rise. Watson Farley employed 708 staff in total last year, up 9 per cent from 650 in the previous year, while the number of qualified lawyers surged by 15 per cent to 377 from 339. However, the number of equity partners stood at 62.5, unchanged from 2011/12.

The headcount increase was partially due to the opening of its Frankfurt office in January 2013 (14 December 2012) with the hire of a three-lawyer team from Salans. Frankfurt was the firm’s second overseas office launch in one year, following a launch in Hong Kong in March 2012 (17 February 2012). The firm currently has 14 offices with London remaining its sole presence in the UK.

The London office, housing 138 lawyers including 51 partners, generated £44m in 2012/13, or 43 per cent of Watson Farley’s global income.