Simmons & Simmons has posted one of its strongest results since the banking crisis, with the City firm announcing a 12% hike in revenues to hit £354m. After a year of sustained recruitment and foreign expansion, the 280-partner firm also saw net profits surge 19% to £110m and profit per equity partner (PEP) up 8% to £686,000.
The headline 12% growth rate comes after a 7% increase for 2016/17 and looks set to be one of the most robust showings in its weight class this year even against the backdrop of active markets. In common with many large City firms over the last decade, Simmons has struggled to sustain strong growth.
Simmons managing partner Jeremy Hoyland (pictured) told Legal Business that the revenue growth was ‘all organic’ and ‘significantly greater than expected’. He attributed the performance to high demand in the firm’s core sectors, which span funds, financial institutions, healthcare and life sciences and TMT. Together these areas contributed to over three quarters (76%) of the top 20 UK firm’s income.
‘We have focused on those areas for quite some time and it’s great to see revenues coming from there,’ added Hoyland. ‘Most or all of our laterals over the past year have come from these areas.’
Simmons made 25 lateral partner hires and nine partner promotions throughout the year, and Hoyland noted that the expansion of its partnership ranks accounted for the discrepancy between the firm’s sharply rising net profit and lower PEP percentage growth figures.
Hoyland added that the firm’s focus on alternative legal services had also paid dividends, with its flexible resourcing platform Adaptive amassing £10m in turnover throughout the year. ‘It doesn’t have a big reputation in the market yet but £10m is not immaterial. We are focusing a lot on these non-standard legal services.’ The Adaptive business was launched in 2014.
The firm also benefitted from an influx of one-off GDPR work, which accounted for roughly £1m in revenue over the year.
In terms of strategic objectives for the year ahead, Hoyland pointed to continental consolidation: ‘We continue to have some offices where we want to have greater strength in depth. We’ve seen growing revenue in Amsterdam and Paris but we’re keen for our other European offices to expand. We have a lot of offices for a £350m business so it can be quite thinly spread, especially as our business tends to be quite niche.’
Further launches in Europe would build upon the firm’s establishment of a Dublin branch, announced in October last year. The office was opened with a lateral hire from Mason Hayes & Curran.
Other firms to announce 2017/18 financial results include Pinsent Masons, which recorded a 6% growth in turnover to £449.8m.
Despite concerns regarding the impact of Brexit on the UK economy and unease over global trade tensions, 2017/18 is widely tipped to be one of the most lucrative financial years for major law firms since the 2000s boom.