Reed Smith has seen its global revenue fall 4 per cent from $1.23bn to $1.1bn amid a reduction in lawyer headcount of over 80 in 2016.
The revenue decline is the second consecutive drop for Reed Smith, which last year reported a dip in turnover of 2.5 per cent. Reed Smith’s revenue in 2016 is now at the same level as it was in 2014, when the firm grew from $1.075bn to $1.15bn (£746m).
The firm’s PEP meanwhile stayed static last year at $1.1m, following a dramatic 8 per cent decrease in the 2015 financial year.
Managing partner Sandy Thomas said the firm had outperformed its expectations, particularly after the reduction in headcount of 5 per cent to 1,537 lawyers.
“Fewer lawyers is naturally going to have an effect on revenue,” Thomas said. “We’re trying to manage our headcount, which is a global endeavour. The market is characterised by relatively static demand and firms need to focus on this.”
Thomas would not be drawn on which jurisdictions or practices had seen the greatest reduction in headcount. A total of 45 lawyer roles were cut across its US, UK and Middle Eastern offices in January last year as a result of a restructuring exercise.
The numbers do not include Reed Smith’s 2017 recruitment of a 50-lawyer team from King & Wood Mallesons in Europe – one of the largest group hires to have been made from the collapsed firm.
The firm did not close any offices in 2016, instead announcing a formal alliance in Singapore. Alliance firm Resource Law is made up of nine lawyers in total and is led by Mohan Subbaraman, who moved from Ince & Co’s alliance firm Incisive Law last October.
Reed Smith continues to house its administrative functions in Pittsburgh in its global customer centre (GCC) launched a decade ago. Thomas said the firm had been evaluating whether it needs a GCC in Europe or Asia, but that there was nothing to announce on it as yet.