Legal Business Blogs

‘Below our expectations’: RPC profits down 8% as revenue edges up to £103m

RPC’s 2016/17 global profits fell 8% to £26.4m, down from last year’s £28.5m, in a year of investment and external challenges for the firm. Growth in turnover also slowed, reaching £103m, a modest 2% rise on the previous year. 

James Miller (pictured), who took over as managing partner from Jonathan Watmough in January, admitted the profits had come in ‘below our expectations’. He attributed the drop, however,  to continued investment in RPC Consulting and its Centre for Legal Leadership, as well as challenging external market factors.

Miller said that, ‘as for other firms, the referendum and its surprising outcome affected the volume of work coming through the pipeline, so revenue was lower than we hoped’.

The profit per equity partner (PEP) also dropped 8% from £363,000 to £334,000.

In recent years, RPC’s growth has consistently risen, with a record 6% increase in revenue in 2015/16, to £100.5m from £94.4m. The previous year it rose 12%.

The fall in profits contrasted to 2014/5’s 19% increase, and by a more modest 1% rise in 2015/16.

Miller noted, however, the strong performance by RPC’s Asian teams in Hong Kong and Singapore He expressed his satisfaction at RPC picking up ‘some excellent new mandates and panel places across the business globally’.

He was also optimistic for the upcoming financial year, and said the firm sought an uptick in corporate work, and looked forward to its commercial disputes pipeline ‘shaping up nicely’ as well as a strong-looking insurance business.

The firm, made up of 79 all equity partners and more than 300 other lawyers, is known for its work with the insurance industry and branched out into management consultancy in 2015, targeting its core insurance clients.