The latest results for firms in the second half of LB100 are a mixed bag, as Howard Kennedy reports inflated revenues reflecting its recent merger with Finers Stephens Innocent, Clarke Willmott posts a fifth consecutive year of falling revenues and Manches unveils a sharp fall in turnover and profit.
Clarke Willmott’s revenues edged down 1% from £33.5m to £33.1m, while profits per equity partner (PEP) is down 14% to £141,000 from £163,000. Top of the equity is £152,000, compared to £110,000 at the bottom.On the back of five years of sliding income and posting a fall in both revenue and net income last year, the results will come as disappointment to chief executive Stephen Rosser (pictured) who unveiled a new three-year strategy last summer. In an interview with Legal Business in last year, Rosser said that a major element of his strategy was to bolster the financial strength of the firm and reduce its debt burden. It would appear that there is still some way to go.
But if the results for Clarke Willmott underlined tough current market conditions, then Manches has truly endured a year to forget. Turnover is down 13% to £26.3m from £30.2m, while net income has fallen by 43% to £2.15m. Profit per lawyer (PPL) at the firm is now just £15,000 and the profit margin at 8% is less than half its level in 2008, when PPL was £35,000 and the margin was 16%.
PEP at the firm, which suffered the loss of it most high-profile family partner Helen Ward to Stewarts Law last autumn, is now just £134,000 compared to £235,000 a year ago.
However, Melvin Pedro, Manches managing partner said: ‘We are very positive about the firm’s future and are in a good position to capitalise on the market upturn. Over the past year, Manches has been consolidating in certain areas and investing in strategic ones in order to take advantage of growth opportunities which exist across all three of our UK locations.
‘We have cut our cost base and are also re-focusing our firm to concentrate our strategic business efforts in specific sectors where we have distinct competitive advantage. Last year’s results are a reflection of losing a team from within the family department, a flat market for mid-size transactions, and the impact of the recession, most notably on our property team, where many projects for clients have either been put on hold or postponed indefinitely.’
In contrast, the 2012/13 financials make better reading for Howard Kennedy FSI, which has posted inflated revenues following the merger of LB100 firm Howard Kennedy and Finers Stephens Innocent at the turn of this year. The firm has released combined figures for both legacy firms of £40.6m, up 46% on the £27.8m posted by Howard Kennedy alone last year.
However, while net income at the combined firm is up by 158% on that provided by Howard Kennedy in 2012, PEP at the new firm is half of Howard Kennedy’s £259,000 last year at £129,000. This is in part because the combined firm has increased its equity partner ranks considerably – Howard Kennedy FSI has 70 equity partners, five times the 14 equity partner legacy Howard Kennedy posted last year. Given the difficult trading conditions for advisers outside the top 50, the firm has to be commended for sticking to its guns on equity participation.