First batch of financials spin promising story for UK firms

Early results in the 2012/13 financial reporting season continue to set the scene for an uptick in the UK legal market.

The best performer so far in turnover terms has been DWF, which posted an 84 per cent increase in turnover from £102m in 2011/12 to £188m at the close of 2012/13 (6 June 2013).

The growth comes as no surprise after an acquisitive 12 months for the firm, which in June last year merged with Scottish firm Biggart Baillie (7 June 2012) and in February with Fishburns (18 January 2013) before rescuing ailing firm Cobbetts (6 February 2013).

There has also been growth in pockets of the civil profession, with revenue rises at Harper McLeod, Mishcon de Reya, Weightmans and Michelmores. Harper McLeod bucked the malaise in Scotland with a 9.5 per cent rise in turnover, to £21m, while Mishcon de Reya smashed its revenue target with a massive 14 per cent hike, to £83.4m.

Other climbers include Bristol firm TLT and Manchester firm JMW. The latter revealed a 13 per cent increase in revenue from £13.2m in 2011/12 to £15m in 2012/13 thanks to a significant boost in online instructions (28 May 2013), with 549 cases billing £710,000 coming from the web in 2012/13 compared to 279 cases billing £281,521 in 2011/12.

Bristol’s TLT, meanwhile, had a strong year on the back of expansion, posting a 10 per cent increase in revenue for the 2012/13 financial year to nearly £50m (6 June 2013). The firm’s fee income rose from £44.5m in 2011/12 to £49m in 2012/13 following a Belfast launch and a merger with Scotland’s Anderson Fyfe, which contributed £2.4m over ten months (9 May 2012).

Weightmans too broke through the £80m barrier, posting revenues of £82m – up from £77.1m in 2011/12. The firm has grown by 64.6 per cent since 2007/08, driven in part by two acquisitions in 2011 – Mace & Jones and Vizards Wyeth.

Exeter’s Michelmores also posted a 15 per cent turnover rise for the financial year (16 May 2013). The increase, to £22.3m (up 32 per cent from £16.9m in 2007/08), also saw bonuses paid out to all staff, equivalent of 3 per cent of their salaries.

Meanwhile Taylor Wessing reported a 7 per cent increase in global revenue for 2012/13, with fee income rising from £212m to £228m (29 May 2013). The firm’s UK turnover saw a 3 per cent increase from £101m to £104.5m, while its partnership grew 15 per cent to 365 partners.The firm added Singapore ally RHT to its offering last March (9 March 2012) and merged with Austrian-headquartered ENWC last May (4 May 2012).

However fee income at Addleshaw Goddard remained static over 2012/13, with the firm posting a revenue drop of two per cent from £170m to £167m. Average profit per equity partner (PEP) increased marginally by 2.5 per cent from £446,000 to £457,000 while profit margin was at 27 per cent compared with 26.5 per cent a year ago.

Likewise Olswang reported marginal growth and a dip in profit during 2012/13. The firm reported 3 per cent growth in total revenue, up from £108m in 2011/12 to £111.3m in 2012/13, while average profit at the firm fell 4 per cent (4 June). Olswang’s CEO David Stewart admitted that the recent financial year had been “more challenging” than the previous year, as had achieving similarly impressive financial results.

While the majority of results so far tell a positive story, it is The Lawyer’s experience that the doom-makers will hold off as long as they can to volunteer their figures. It will be interesting to see if the big revenue rises continue or if the market will go back to the more usual story of marginal recovery.

Firm Turnover (£m)  
  2011/12 2012/13
DWF 102 188
Harper McLeod 19.3 21
Mishcon de Reya 73.1 83.4
JMW 13.2 15
TLT 44.5 49
Weightmans 77 82
Michelmores 19.2 22.3
Taylor Wessing (global) 212 228
Addleshaw Goddard 170 167
Olswang 108 111.3