Nobody takes pleasure in firms’ bad results, but it’s hard not to smile at what’s going on at Cobbetts. Not because of the firm’s poor financials,
but because it thinks it can deflect attention by, er, not declaring its profits this year. This is the law firm equivalent of sticking your fingers in your ears and saying “La, la, la, la, la”.
We tried, we really did. We asked nicely and everything. After conversations with dozens of people, from lawyers with connections to Cobbetts to law firm consultants who know the model inside out, the estimate is obvious: if costs remained the same (and most accountants tell us that this is an optimistic assumption) then a 18 per cent turnover drop translates into a loss of around £2.5m.
Yet in an astonishingly cackhanded way, Cobbetts thinks it can bury the bad news. It’s no secret it’s been a tough year for the firm; it made 10 per cent of its workforce redundant this year. It’s hardly as if Cobbetts is alone in having a hard year, although the extent of its troubles may be more dramatic than at some of its peers.
The oddest thing is that Cobbetts is an LLP, meaning the official figures are going to come out sooner or later, so its comedy ostrich strategy is going to backfire very badly.
A profit slump is always going to be news; the Financial Times has been full of such stories for the past year. But the notion that the press takes some sort of warped pleasure in this is utterly misconceived. (Of course, it’s not going to stop internet postings. The blogosphere , where posters comment anonymously, can be vicious.)
But a measure of a firm is the way it deals with bad news. Blake Lapthorn’s awful year made our front page two weeks ago, but there was a difference. Blake Lapthorn managing partner Walter Cha, while hardly leaping up and down with desperation to talk about his firm’s results, handled the news in a matter-of-fact manner. Cobbetts boss Michael Shaw, by contrast, did not.
If firms want to be taken seriously as businesses working in what is now a transparent financial culture, then misplaced pride won’t get them anywhere. Get the news out, get it over with, move on. And grow up.