Following an unusual waiting game that has ensured Berwin Leighton Paisner’s profit figure has remained a topic of growing interest since the financial reporting season ended, the top 50 firm has confirmed that its profits are down by nearly 40%.
The 786-lawyer firm has revealed a 39% drop in profit per equity partner (PEP) from £660,000 to £401,000 and a 38% drop in net profits to £39.4m. This is the most significant drop in PEP of the LB100 top 50 firms over the past year, following 332-lawyer Trowers & Hamlins, which saw its PEP fall by 37% to £304,000. It is the second largest drop in PEP of both halves of the LB100 after Manches in 93rd place, which recently confirmed it is in merger talks with Penningtons and which saw its PEP fall by 43% to £134,000.
BLP’s profit drop also comes in a year that saw the firm’s revenue fall by 5% to £233m, placing it just inside the LB100 top 20 at number 19, the worst financial performance of the top 25 law firms.
The results follow the firm’s sustained and aggressive lateral hiring programme, particularly during 2010 and 2011, together with office launches in jurisdictions including Germany and Beijing.
A spokesperson for the firm said: ‘2012/13 was a year of integration and consolidation following rapid international growth. We did continue with investments but suffered from the weak transactional market which had an impact on turnover, PEP and profit.’
The confirmation of this drop in profitability has been preceded by the departure of a number of big-name lateral hires including contentious tax head Liesl Fichardt, who left for Clifford Chance this month, and head of private equity Raymond McKeeve, who left for Jones Day in August.
Other recent departures include Managed Legal Services head Patrick Somers, who joined DLA Piper this month, and Allen & Overy leveraged finance partner Andrew Bamber, whose destination is as yet unknown.
The firm this year completed a redundancy round, which in May resulted in the loss of 102 jobs including 58 legal staff and 44 secretarial staff with the aim of reducing salary costs by 15%.
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