Mid-sized City firm Lawrence Graham has recorded a 3.5 per cent drop in profit per equity partner (PEP) despite turnover breaking £60m for the first time.
PEP has dropped to £401,000 for 2004-05, down from £415,000 during the 2003-04 financial year, when the firm posted record average PEP. Top of equity has similarly declined 9 per cent to £560,000, down from £615,000 in 2003-04.
However, the decline in profit was not reflected in the firm’s turnover, which broke £60m for the first time. Turnover reached £61.1m for 2004-05, compared with 2003-04’s £58.6m.
Lawrence Graham will not make up anyone to partner this year. The firm has a strict rule of considering only seven year-qualified assistants for partnership. This means that no one is in the frame for promotion.
Despite the dip in profit (first revealed on www.the lawyer.com, 14 June), the firm said it was pleased with the results, as they were better than previous expectations, which were that PEP would drop below £400,000.
A spokesperson for the firm explained that this was because 2004-05 had been a year of high costs after it incurred the full cost of its August merger with Tite & Lewis.
The spokesperson also said that, although the firm would not make up any new partners internally this year, it had taken on seven new partners in the last 12 months, including five from Tite & Lewis.