Litigation specialist Stewarts Law has posted its third consecutive year of double-digit growth, with a record profit per equity partner (PEP) rising 30% to reach £1.9m.
In its best year in revenue terms to date, the firm marks the conclusion of a number of high-value long-running matters, with its 2016/17 figures revealing a 25% revenue rise to £78.1m.
However, the firm said the breakdown of revenue is drawn purely from litigation and includes £1.2m in respect of ‘value recognised on certain contingent work where the income recognition policy applied in our management accounts differs to the statutory financial statements’.
The UK’s largest litigation-only firm, which specialises in complex high-value disputes, has posted a 124% increase in revenue over the last five years.
Meanwhile, Stewart’s average PEP increased 125% over the same period. Net profit stood at £36.4m, also a 25% increase from last year, while compensation for all partners totalled £44.5m, a 24% increase rate.
Managing partner John Cahill (pictured) said Stewarts was pleased to post ‘another strong set of financial results’ as the firm concluded a number of long-running cases which ‘contributed to our strong revenue and profit figures’.
UK fee income continues to account for the majority of the firm’s revenue, as the top of the firm’s equity now stands at nearly £2.5m, 40% more than the £1.8m it recorded in 2015/16.
The lower end of the equity scale stands at nearly £1m, a significant increase from £642,000 in the last financial year.
The firm’s largest piece of concluded litigation this year was the settlement in June of the 2008 £4bn shareholder rights issue group action against the Royal Bank of Scotland (RBS), in which the last shareholders accepted a lsat-minute offer of 82p per share.
Over the year, Stewarts also represented over 125 institutional funds which have filed a damages £100m claim against retailer Tesco, accusing it of breaching the Financial Services & Markets Act in relation to its alleged over-statement of earnings in 2014.
Last year, the litigation firm also recorded double-digit revenue growth of nearly 19% to £62m, alongside a 26% increase in net profits to £29m. That year, PEP also grew 25% to £1.6m.
On this year’s results, Cahill said: ‘In over 50 per cent of those disputes we are sharing risk with our clients through contingent fee arrangements including both damages based agreements and conditional fee agreements.’
‘Increasingly, this will result in “non-linear” patterns of income which will in turn lead to fluctuations in profit,’ he added.