Shoosmiths has posted an 83 per cent hike in net profit for the 2009-10 financial year with average profit per equity partner (PEP) rising 69.5 per cent over the same period.
The figure rose from £6m in 2008-09 to £11m, while PEP increased 69.5 per cent to £256,000. Turnover, however, has continued to fall. After reporting a 4 per cent drop to £99m last year, the figure fell a further 9 per cent to £90m in 2009-10.
Chief executive Claire Rowe said a series of cost-cutting measures were behind the boost in profits. A total of 107 staff redundancies have been made in the last year, and in October all staff earning more than £25,000 were asked to take a permanent 3.5 per cent pay cut (26 October 2009). In total 90 per cent of staff agreed to the cuts, which could be reviewed later this year. The firm also introduced a flexible working scheme and was one of the very few firms that withdrew training contracts from future trainees without offering any compensation (30 March 2009).
Rowe, who took up the role last May after previous incumbent Paul Stothard stood down (22 May 2009), said the PEP increase should be put in the context of last year’s results, when the figure fell by 54 per cent to £151,000.
Despite the dramatic increase this year it remains well short of 2007-08 figure of £372,000 (6 July 2009).
“This was definitely an improved performance, although in the previous year we were in a particularly poor position,” Rowe said. “We’ve changed our business focus toward profitability, not income, and had budgeted for a reduced income, so this is not unexpected.”
She added: “Last year was a challenge and there’s been increasingly fierce competition in the market, but this is a positive step toward our strategic goal of improving profitability.”
Despite its push to reduce costs Shoosmiths has continued to invest in its Manchester office as it looks to build up a full service offering. In April it brought in personal injury specialist Debra Woolfson (26 April 2010).