Cobbetts’ LLP filing reveals full extent of difficult year

Cobbetts’ initial set of LLP accounts reveal a turnover of £55.4m and a net profit of £12.9m for the year ended 30 April 2006.

Cobbetts, which converted to LLP status in November 2005, increased its turnover by 6 per cent, up from £52.4m in 2005.

Profit available for division among the firm’s 89 members, which includes full equity and fixed-share partners but not salaried partners, was up by 9 per cent to £12.9m.

This equates to an average of £145,000 per member. The average profit per equity partner at Cobbetts last year was £190,000.

The LLP accounts also showed that total debts at Cobbetts, including unpaid bills and accrued income, stood at £23.37m. Almost two-thirds of this figure, £15.4m, was made up of bills yet to be paid, while £5.8m was work in progress.

The firm owed £10.83m, including £3.15m in bank loans and overdrafts and £2.85m to other creditors, including taxation and social security costs.

Cobbetts managing partner Michael Shaw told The Lawyer that, while top-line growth was disappointing in the 2005-06 financial year, it was a period of considerable change for the firm as it rationalised the skills sets within the partnership in order to build a national practice. “In light of that we consider the performance to be entirely credible,” said Shaw.

From May to December last year the firm embarked on a full restructuring exercise, which resulted in 30 partners leaving the firm.

“We’re continuing to grow despite the rationalisation within the partner group last year. We need to get this behind us so we can move the business on. Our annus horribilis is well and truly behind us,” said Shaw.

Cobbetts has also announced its 2006-07 half-year financial results. The firm posted £24.8m in the first six months and fell just short of the £40m mark in the first nine months, the latter figure representing a 7 per cent increase in growth on the same period last year.

During the first half of the current financial year, the employment department saw an increase in turnover of 24 per cent, while corporate grew its revenue by 40 per cent.

As first reported by The Lawyer (19 February), the regional firm, which already has offices in Birmingham, Leeds and Manchester, is set to open in London with a corporate finance practice.

The firm is in negotiations with two partners to launch the London office and is hoping to build the City branch rapidly to around a dozen lawyers.