Addleshaw Goddard has started the week with news that managing partner Paul Devitt is to step down early, while partners are up in arms over miscalculated partner profit points and it has resigned itself to losing out on recovering a signifcant success fee.
The top 25 LB100 firm confirmed this morning (17 March) that Devitt is to stand down a year before his tenure is due to end on 30 April 2015, kick-starting an election process to ‘coincide with the next iteration’ of the firm’s strategy.
Devitt has informed the firm’s board that he will not stand for re-election. He was re-elected managing partner for a second three-year term in May 2012, following an uncontested election.
According to a firm statement: ‘bringing forward the election process to coincide with the next iteration of our strategy allows for a constructive discussion about the next phase of the firm’s strategy, helps to build momentum entering that phase, avoids a drawn out hustings, and provides certainty over our managing partner for the next three years, from the beginning of the coming financial year.’
The firm added: ‘[Devitt] has made an outstanding contribution to our firm and been enormously influential in helping us to build the strong and growing business we enjoy today. We understand and respect Paul’s decision not to stand for re-election and look forward to the continued and valuable contribution he will make to our business as a partner in the corporate division.’
Nominations have not yet been invited from the partnership, and the firm has refused to comment further until the election process is completed. The firm has previously refused to comment on claims by former lawyers that real estate head Adrian Collins and business support and restructuring head John Joyce have put themselves forward for the role.
It has been a difficult period for Addleshaws performance-wise in recent years, with the firm posting a 15% fall in revenue between 2008 and 2013, while its latest limited liability partnership results revealed that its bank borrowing increased by £4m as 2012/13 audited revenue at the firm fell 2.4% from £168m to £164m.
This situation has not been helped by a recent miscalculation of partner points. The firm has confirmed it reviewed the administration of its partner remuneration system following an error in calculations at the start of the current financial year, which related to the number of points by reference to which profit is distributed to partners, which will result in a slightly lower than forecast end-of-year pounds per point.
The firm said: ‘The miscalculation of total number of points awarded does not in any way affect the overall profitability or financial stability of our business which remains healthy and financially stable and sound.’
‘We have reviewed and introduced improvements in how we administer the pointage system to ensure it cannot happen again.’
Also this week, it has emerged that the firm has decided to write off a large success fee on the basis that it would be extremely difficult to collect. That fee is understood to relate to litigation brought by the late Russian oligarch Boris Berezovsky.