London’s Midsizer legal landscape looks a little different this year. Field Fisher Waterhouse and Withers move into the Major City ranks, each with revenue surpassing £90m, establishing them as major forces in the City.
More impressive, however, is the entrance of litigation boutique Stewarts Law into the LB100 this year. And what an entrance it is. One of the standout performers across the whole table, the firm has had a bumper year.
Standing on the peripheries of the LB100 last year, the firm ranked 103. But this year saw revenue at the litigation outfit skyrocket by 42% to £28.5m, gifting the firm entrance into the top 100 for the first time. The 34-partner litigation outfit has established itself as a credible disputes practice in the London market, thanks to a steady flow of conflict work from bigger firms, including Quinn Emanuel Urquhart & Sullivan.
Since 2009, the firm has almost doubled its lawyer headcount, from 44 lawyers to 85 in 2010/11. Equity numbers have also swelled and the firm is now home to 13 equity partners. The rapid growth has done little to dent profitability. Profit per equity partner (PEP) is an enviable £890,000, with the top of equity looking more like that of the Magic Circle, at £1.05m.
Another contender for the good year category is Mishcon de Reya. With a startlingly successful year under its belt, the firm’s revenues shot up 37% to £65m. The revenue rise can, in part, be attributed to a decision to focus the firm’s practice on acting for high-net-worth individuals. After a year that saw Mishcons’ partners acting for celebrities embroiled in the phone-hacking scandal and the furore over super injunctions, that decision seems to have paid dividends.
‘Last year was phenomenal,’ says Mishcons’ executive partner James Libson. The firm is hoping to develop into an £80m business by next year, budgeting for a 26% growth in revenues. Ambitious stuff. Libson continues: ‘One thing we realised is that London remains very strong in activity for high-net-worth individuals across the board and mid-sized firms are ideally placed to do this work.’
Focusing on rich entrepreneurial clients is a strategy that other London Midsizers are keen to ape. Howard Kennedy, which released its financials to the market for the first time this year, is keen to take a piece of the high-net-worth pie.
‘I have been doing a lot of work focusing on our strategy in the last couple of months,’ says Mark Dembovsky, who started as chief executive at the firm in January. ‘For us it is about acting for the entrepreneurs, and the key people in mid-cap companies, as well as high-net-worth individuals.’
The West End firm saw revenues rise by a healthy 7% during 2010/11 to £29.5m, marking a vast improvement on the year before when fee incomexfell by 11% to £27.5m. Despite this, profitability remains low with the firm’s 134 lawyers bringing in just £30,000 each.
Fellow West End firm Forsters had a surprisingly good 2010/11 given the continued sluggishness of the UK real estate market.
The property-focused firm’s turnover is now higher than the heady days of 2007/08 (when it was £23.6m), with fee income standing at £25m. Profit per lawyer is also up to £66,000 from 2009/10 when it was £58,000.
Managing partner Paul Roberts puts this down to the firm’s core, cash-rich, institutional clients looking to develop more real estate.
‘The property market is definitely improving and business is definitely improving with it,’ he says. With 49% of the firm’s business derived from real estate, Roberts must be hoping that the bounce back will continue.
He also expects to pick up work from top-20 firms that have lost interest in real estate. ‘We see great opportunities in the realignment of property teams at the big firms. One or two are actively looking to disengage and we see an opportunity there,’ says Roberts.
Lewis Silkin has also enjoyed a good few years of consistent growth, with revenues rising by an average of 9% every year for the past five years. Back in 2002, when the firm entered the LB100 for the first time, the firm had a turnover of just £16.9m and was ranked in 94th position. After a decade of repeatedly sound performance, the firm has moved swiftly up the rankings and is now ranked in 71st position with a turnover of £35.6m.
Managing partner Ian Jeffrey puts this down to decisions made in the 1990s. ‘The longer-term evolution of the business
began in the ‘90s, which is when we saw a clearer strategy emerging. That period was really the maturing of the firm towards the shape it has today,’ he says. The firm’s strong performance is no doubt helped by the counter cyclical nature of its biggest practice group, employment, with the group hauling in some £6m worth of revenue last year.
Meanwhile, Trowers & Hamlins and LG’s fortunes have both been on a rollercoaster of late. Trowers’ net income slid by 18% to £11m, while revenue also dropped by £11m to £78.6m.
Trowers’ heavy reliance on public sector work has made growing the business difficult in a climate of government budget cuts. The firm’s traditionally strong Middle East practice has also had problems: in May the firm announced it was closing its Jeddah office after opening it just 12 months before.
LG saw profits rocket by 64% last year after some serious cost cutting. But this year was less rosy with the firm’s revenue dropping by 9% during 2010/11 and profit per lawyer dropping by 28%. 2009/10 was undoubtedly a bumper year for the firm but managing partner Hugh Maule is less worried by this year’s turnover drop and takes a longer-term view. ‘The year was just a bit quieter than the previous year. Our clients have just been a bit quieter. If I look at our performance over a longer period, PEP is down a little but we are still in the £400,000 range. Aside from 2008/09, [the firm’s performance] has been pretty stable and consistent. Turnover has been in or around that mark for a number of years,’ he says. LB