With its fortunes tied to its large financial services client base, Simmons & Simmons has brought to an end a period slow growth to post a record-breaking year, with revenues up by 8% to £290.1m, while profits per equity partner soared by nearly £100,000 to hit a new high of £649,000.
Following a number of static years, Simmons & Simmons experienced a resurgent year in 2014 with a steep rise in funds work and a barrage of financial regulatory mandates. Revenue rose by £22m from £268m as the City firm capitalised on a raft of work generated by the implementation of the Alternative Investment Fund Managers Directive in the UK in late 2013 to limit the leverage of funds and a boom in transactional work.
The figure sees the firm pass its previous peak in 2008, when revenue stood at £289.2m. Profits per equity partner (PEP) rose by 17% from £553,000 to £649,000, also breaking the water mark set in 2008.
The sharpest growth came at Simmons’ City office, with strong growth also recorded in Bristol, where the firm opened an office in 2012 to reduce costs. Managing partner Jeremy Hoyland told Legal Business: ‘It was slightly unanticipated that most of the growth came in the UK. We have a bigger proportion of our business in finance than most other firms, and while it’s been tough in the financial crisis, we’ve now seen a good return to form. The standout performance has been in the funds practice. Bristol has made a positive contribution to our UK figures and we continue to grow there.’
Hoyland added: ‘Real estate finance has been busier, we’re seeing more on the asset finance side and also the equity capital markets, which is as volatile as ever but we had a really good year in that area, and the straight debt as well. We had a good year across the transaction finance work.’
Simmons also had some big client wins last year, making it onto the legal panel of energy giant BP for the first time last year, and was instructed on big regulatory mandates for banking clients Morgan Stanley, Barclays and Société Générale.
On the back of this growth, Simmons & Simmons made 19 lateral hires last year and carried its biggest promotions round since 2011 in May, with 13 lawyers joining the partnership. There was also a launch in Luxembourg, with the firm opening an office there in January targeting funds work.
While this year’s growth helped the firm to close the gap in PEP held by its nearest rivals in the City, Ashurst, Hoyland said ‘there is no reason we should be less profitable’ and aims to ‘catch up’ with the figures its closest rivals pay over the coming years.
With the UK generating the bulk of the growth, Simmons is now targeting growth of its £80m book of business in continental Europe. Hoyland said: ‘We’ve made investments in the last year and the year before where we need to see a better return on those investments. We need to sell the likes of Luxembourg and Singapore to our clients. We would like to increase the proportion of our revenue coming from Europe. While the eurozone is having a rough time we have a relatively small proportion of our business in Germany and that’s a key market. We have our Munich office, which is two years old, and we’re still actively looking for growth in the German market.’