Cracks show as crunch hits firms’ half-year figures

Camerons and Lovells eye double-digit growth as fee income stagnates across City.

Cracks show as crunch hits firms’ half-year figuresLaw firms across the market are experiencing mixed financial fortunes at the half-year stage, with CMS Cameron McKenna and Lovells standing out as the only two firms predicting double-digit growth.

With the half-year coming to a close on Friday (31 October), firms have yet to finalise their figures, but Lovells managing partner David Harris said he expected the firm to see a rise in turnover compared with the same period last year.

“We’ve been consistently ahead of last year every month this half and we expect growth to be in double digits,” said Harris, adding that the firm had witnessed a significant increase in banking restructuring work and litigation in the last few months.

At Camerons, managing partner Duncan Weston said that although utilisation levels in real estate and corporate had dropped off, he expected a 10 per cent increase in fee income compared with the first half of 2007-08.

Magic circle revenues appeared to be holding up, with all four firms predicting modest rises.

Clifford Chance managing partner David Childs said the firm’s corporate practice remained reasonably busy, although banking and finance, which was primed for an upsurge in restructuring work, had slowed.

Sources at Freshfields Bruckhaus Deringer said the firm’s corporate practice had defied expectations by almost certainly meeting its budget at the half-year stage, although the practice could lose out to dispute resolution as the largest contributor of revenue at the end of the full financial year.

Joint senior partner Konstantin Mettenheimer said: “We’re worried about a real recession looming, but with all the restructuring work around at the moment we’re holding our own.”

At Slaughter and May, practice partner Paul Olney said the firm, which has been instructed on all of the Government’s credit crunch-related work, had been “extremely busy” for the past six months.

He added: “We’ve seen a fall-off in small and medium-sized M&A. I’m fairly gloomy about the prospects for M&A going forward.”

Elsewhere, Addleshaw Goddard, Eversheds, Taylor Wessing and Wragge & Co were all predicting revenues to be as much as 10 per cent lower than in the first half of 2007-08.

Additional reporting by The Lawyer staff