Following the completion of its transatlantic merger with Sutherland Asbill & Brennan on 1 February, legacy Eversheds today (19 May) reported revenue growth of 8% to £438.6m for 2016/2017.
However, the firm’s net profit and profit per equity partner (PEP) dipped by 4% and 2% respectively, with PEP at £726,000, down £16,000 from £742,000 in 2015/2016. This follows flat PEP against 7% revenue growth in the previous financial year.
The revenue increase means Eversheds’ top line has grown 20% in the last five years, from £366m.
Eversheds Sutherland chief executive Lee Ranson (pictured) said: ‘To have turned in this kind of result against the backdrop of Brexit and continued political and economic uncertainty in many of our key markets speaks to the strength and resilience of our business.’
However, just months after formalising its tie-up with Sutherland, Ranson attributed the union as one of the main causes for the fall in profitability: ‘Continued strategic investment in people, recruitment and, most notably, our US combination led to an anticipated slight dip in profitability’.
However, he told Legal Business: ‘We are making sure we are investing for the future. The acquisition in Germany [of Heisse Kursawe in 2015], investment in new recruits, systems, technology and the US combination, all of that comes into play.
‘The combination we achieved was not an investment we budgeted for. Combinations have front-loading, due diligence and time costs, but those investments eventually pay back. This is organic growth, I’m very pleased.’
Earlier this year, the firm’s LLP accounts for 2015/16 showed the UK accounted for £340.2m of its total turnover, up from £336.5m, while the rest of Europe made £37m in revenues, up from £17m the year before. This compares to Sutherland’s last reported top-line of $300m in 2015.
The firm’s accounts also revealed that the firm’s average remuneration per member has dropped 10% from £410,000 to £386,000 as the firm’s staff costs have increased 16% from £150.2m to £174m.
Last month, the firm also made 20 partner promotions, with 50% of these promotions outside the UK in countries such as Austria, France, Germany, Hong Kong, Ireland, Italy, Latvia and the United Arab Emirates. The round was a reduction on last year when the firm made up 26.