Macfarlanes has reported robust financial results for 2019/20 – its tenth consecutive year of revenue growth – with virtually double-digit increases in turnover and profit per equity partner (PEP).
Added to this, the firm has also announced an 88% retention rate of trainees qualifying next month, as well as the lateral hire of well-regarded finance partner Malcolm Hitching.
The results announced today (3 August) show turnover grew 9.5% to £237.65m and PEP 10% to £1.91m, a notable year-on-year improvement on 2018/19, where revenues increased 8% while PEP fell marginally. Meanwhile, operating profit increased 14% to £126m, giving the firm a margin of 53%.
‘At the start of the year we would not have predicted the outcome that was achieved,’ new senior partner Sebastian Prichard Jones (pictured) told Legal Business. ‘There were many reasons for caution, including the governmental situation, Brexit, the General Election and then Covid/lockdown. Throughout the year, however, our clients remained active right across our three main practice areas (transactions, disputes and advisory). The strong activity levels right across the firm produced a decent outcome.’
He added that notwithstanding the current uncertainty, the firm was still investing in the business, with 22 of 25 trainees qualifying this September accepting places as qualified lawyers, representing an 88% retention rate.
Pending a salary review to be conducted in the autumn, the newly qualifying trainees will be paid a provisional base salary of £80,000. Individual and firmwide bonuses will be paid in addition to this as usual.
Head of graduate recruitment Seán Lavin commented: ‘We have not changed our policy due to the coronavirus situation and we are pleased to have been able to maintain our consistently high retention rates for our trainees…We recruit, train and retain them with an eye to the firm’s long-term future.’
The firm has also announced today the lateral hire of finance stalwart Malcolm Hitching, who will be joining Macfarlanes a week today (10 August). A debt finance expert with over 20 years’ experience specialising in alternative credit, leveraged finance, speciality finance and private equity, Hitching joins from the London office of Ropes & Gray, where he has been a partner since 2017. Prior to this, he had spent 13 years at Herbert Smith Freehills.
Commented Prichard Jones: ‘Through periods of market turbulence we feel that it is important to position our practice for the opportunities that more challenging times may present. Malcolm’s hire is a reflection of this thought process.’
Private client specialist Prichard Jones officially took over the senior partner role from Charles Martin in April, following a carefully managed transition period. The latest financial results mark the end of a highly successful 12-year run for Martin, during which time he led Macfarlanes to become one of the most successful and profitable operators in the City.
For more on Macfarlanes’ lengthy run as a City powerhouse, see our 2019 feature ‘Defying gravity – Inside the improbable rise of Travers and Macfarlanes’ (£)