A painful lesson learned the hard way

An avowedly national practice, in the early boom years Shoosmiths’ ascent was one of the most spectacular in the industry. In 2005, still a couple of years from the height of the market, PEP went up 51%, one of the biggest rises in the top 100 that year. Profits finally reached a peak of £408,000 in 2007 before collapsing over the next two years, slumping to £147,000 last year.

The bust led to not only a slump in profits but also a round of lawyer and staff layoffs and trainee deferrals. The latter proved controversial when the firm refused to make payouts to its deferred intake in line with the rest of the market. It all had the ring of a Hammonds about it.

However, Shoosmiths appears to be on slightly more solid ground. Yes, partners have left, but it’s hardly been an exodus. The firm has remained committed to investment, adding a Manchester office in 2009, and has grown its equity partner numbers up to 43 this year from 38. Management likes to maintain that they were the victims of the economic downturn, but the former chief executive Paul Stothard also reflects that the timing of some of the firm’s investments unfortunately coincided with the credit crunch. Shoosmiths isn’t the only firm that in future is going to be a little more circumspect before it commits to ambitious expenditure, regardless of market conditions.

With Stothard now gone, Shoosmiths lifer and litigation specialist Claire Rowe has taken charge. As Mark McAteer points out in his feature, ‘Front Rowe’, her style is just what the firm needs right now. She may not be able to put an end to boom and bust, but she should keep the firm on a more even keel.

One thing she’s not interested in is international expansion. So for stories of worldwide domination, turn to our Global 100 survey, and for the full financials from UK law, including, no doubt, a few more tales of boom and bust, look out for our LB100 when we’re back in September.