Herbert Smith’s average profit per equity partner (PEP) figure has dropped below the £1m mark for the 2008-09 financial year after smashing the financial landmark for the first time last year.
Early indications from the firm are that PEP will drop by between 12 per cent and 22 per cent on last year’s figure. At the end of the 2007-08 financial year PEP stood at £1.036m, meaning on a worst case scenario this year’s figure will stand at £808,000 while on a more optimistic outlook the figure will be £912,000.
Over the same period the firm’s turnover has risen by 5 per cent, up from £421.8m to £444m.
It is understood that the firm’s banking practice has been one of the strongest performing departments over the past year. That said, due to the economic situation the firm has not met senior partner David Gold’s (pictured) four-year target of growing the practice to be a 20-per-cent contributor of revenues.
When he took up the senior partner’s role in April 2005 Gold said that growing the finance division was a top priority, outlining plans to increase its turnover to 20 per cent of the global total within four years.
Litigation and corporate remain the largest contributors to turnover. The firm’s litigation practice scored a major victory in the Buncefield litigation earlier in the year (20 March 2009).
The corporate practice won a number of choice instructions over the course of the last financial year, advising the administrators of Oilexco North Sea (25 March 2009), EDF on its acquisition of British Energy (24 September 2008) and Bradford & Bingley on its rescue package (29 September 2008).