Stewarts Law is to scale back its US operations in favour of an alliance model as it targets £50m turnover within the next 12 months.
The litigation firm launched bases in New York and Delaware last year (17 April 2012 ) but managing partner John Cahill said it had taken a strategic decision to have a collaborative model stateside rather than going into competition with US firms. Consequently the Delaware office will be closed and the New York base slimmed down, Cahill said. As the bases only opened last year Cahill said redundancies would be minimal.
Stewarts has agreed a strategic alliance with New York plaintiff firm Lieff Cabrasar Heimann & Bernstein with a view to receiving referrals and, Cahill said, the plan was to replicate that strategic alliance model with other firms outside the US.
It comes as Stewarts today unveiled a 29.5 per cent jump in revenues for the last financial year from £34.9m to £45.2m. The firm’s 18 equity partners have enjoyed a bumper pay day with average profit per equity partner (PEP) breaking through the £1m barrier to £1.1m (3 July 2013).
The top of equity now stands at £1.4m, above average magic circle PEP levels for 2011/2012. Last year Linklaters’ top of equity was £1.2m, while Freshfields Bruckhaus Deringer’s highest-paid partner took home £1.29m (6 July 2012).
Cahill said Stewarts was targeting turnover of £50m for the 2013/14 year-end with the firm looking to build capacity so it is able to target damages based agreements (DBAs) in a post-Jackson environment. The contingency fee arrangement will allow the firm to receive, by way of fees, a share of the damages should they win the case.
Cahill said corporate clients were requesting that such fee deals be done and the firm needs a strong financial base to be able to service the agreements. Under the DBA model the firm will not get a full payment until the dispute is resolved and that could take years.
Stewarts has also put in place plans to develop a tax litigation group within the next 12 months. Cahill said: “The focus will be on corporates. It is very attractive because there are a high volume of tax cases and they are high in value.”
At the 2007/08 year-end Stewarts Law was ranked at 152 in The Lawyer UK 200 with turnover of £11.9m. Turnover has risen by 280 per cent since then, putting the firm on target to be in the top 60 UK firms for the 2012/13 year.