Mishcon’s profit hit as property team struggles

Mishcon de Reya has seen net profit slide by 17.9 per cent at the 2008-09 financial year-end, with the firm’s property practice hit the hardest.

Net profit fell to £12.65m from £15.4m a year earlier, while turnover was up ­marginally, from £47.1m to £47.3m.

Average profit per equity partner (PEP) for the year stood at £575,000, which was 22 per cent below the £740,000 reported for 2007-08 and 17.6 per cent below the 2006-07 figure of £698,000.

The firm’s equity spread also narrowed, with the top earners taking home £950,000 and those on the bottom rung receiving £275,000. This was down on the previous year, when the equity spread ran from £350,000 to £1.2m.

While the litigation practice experienced a surge in instructions, contributing 49 per cent of Mishcon’s turnover, property accounted for just 19 per cent.

According to managing partner Kevin Gold, the commercial property ­practice has been hit hard by uncompleted deals as a result of clients being ­cautious in light of the ­economic downturn.

Last year Gold said that investment was a priority for the 2008-09 financial year, with a particular emphasis on the litigation practice (The Lawyer, 28 July 2008). The partnership deliberately prevented PEP levels from rising above £710,000 as it looked for new premises from which to grow.

As a result of the ­downturn the plan to move offices was put on hold while the firm reorganised key practices, including the ­creation of a professional negligence team in the ­litigation practice.