Lovells is ordering its partners to work longer hours in a bid to sustain profitability after average profit per equity partner (PEP) soared by 34 per cent during the last year.
Lovells managing partner David Harris has addressed profitability head-on with a series of measures to boost the firm’s finances. Partners’ overall hours targets have been increased to 2,200 worldwide.
Harris hopes this will encourage partners to spend more time on business development and client relationship management (CRM), as billable hours targets remain the same at 1,400-1,900.
Lovells bounced back from its woeful 2004-05 financial results, confirming a record rise in profit for the last financial year.
The 317-partner firm confirmed last week that its profit per point has rocketed by a whopping 43 per cent to £12,000, meaning partners at the top and bottom of equity will pocket £718,000 and £287,000 respectively. PEP, meanwhile, has jumped from £427,000 to £572,000 for the 2005-06 financial year.
The results will be a huge boost for Lovells, which saw a 21 per cent slide in profit in 2004-05. The jump in the firm’s top of equity figure is also symbolic, as it exceeds the 2003-04 figure of £635,000.
Meanwhile, as first reported by The Lawyer (22 May), Lovells’ turnover has increased by just 8 per cent, from £366m to £396m. London revenue has inched up only 2 per cent. In contrast, Lovells’ US, Asia and Continental Europe offices have seen revenue rises of 20 per cent, 20 per cent and 15 per cent respectively.
Lovells addressed costs head-on in December 2004 by axing 25 partners. The firm absorbed one-third of the restructuring costs in the last financial year. Harris argued that profit rose sharply because the firm managed costs tightly, which rose by just 1 per cent.