Legal Business Blogs

After five years of growth Macfarlanes revenue stalls and PEP falls 17%

Following one of its most successful years, Macfarlanes has seen revenue remain static at £161m for 2015/16, up less than 1% from £159.6m.

The firm’s profit per equity partner is down, slipping to £1.29m, down 17% on 2014/15 when the firm reported PEP of £1.55m. Overall profits were also down to £74.5m, dropping 8.8% on 2014/15.

The falling figures follow five years of top line growth and the firm’s PEP rising above that of four of the Magic Circle firms.

The results follow a highly lucrative period for Macfarlanes, with PEP jumping 30% in 2014/15 and 21% the year before. The firm’s PEP remained 7.6% up on 2013/14.

Macfarlanes senior partner Charles Martin told Legal Business: ‘It was a good year. Profit per partner is down significantly but we expected that. We said in our results last year there would be a spike. It will be up on the year before last.’

The London law firm has acted on some major deals in the past 12 months, including advising Altria Group on its shares in drinks manufacturer SABMiller, during its £71bn takeover by AB InBev.

Martin (pictured) added the referendum was not a significant factor in affecting the firm’s results, and that he had ‘no complaints on activity levels’.

He said business could be ‘softer’ following the referendum. He added: ‘We’re spending a lot of time listening to clients and it’s a mixed picture. Some deals are spiked, others are postponed till the autumn and others are pressing on with renewed speed.’

Both senior partner Martin and managing partner Julian Howard were reappointed to their respective roles in January this year, each for another three year term to take them through to 2020.

The firm recently confirmed it was elevating newly-qualified pay levels to £71,000, raising to a potential £98,000 three years post qualification. It also modified its bonus system, increasing the maximum from 15% to 25%.

Read more on the firm in the Focus Feature: ‘This is a gritty place’: Macfarlanes’ leaders on the hustle it takes to look effortless’