It has been a mixed financial year for Anglo-Australian firm Herbert Smith Freehills (HSF), which recorded double-digit revenue growth bolstered by a strong run of disputes work, while profit per equity partner (PEP) fell slightly in what the firm attributed to the ‘volatile global economy.’
With revenues rising 11% from £832.2m to £920.5m, the firm’s chief executive officer Mark Rigotti told Legal Business that it had been a ‘mixed to good period for the firm’.
Rigotti attributed this growth to the firm’s ‘stellar’ increase in EMEA, reflecting contributions from recent new offices in Germany, Johannesburg and Riyadh. Equally, the firm posted double-digit growth in its Paris, Moscow and Madrid offices. Paris revenue grew 10%, while Moscow rose by16%.
HSF’s PEP fell, however, 3% from £779,000 to £760,000. Total profit at HSF also dropped marginally from £258.8m to £256.1m, in what Rigotti described as its fifth consecutive year of investment.
This year, the firm’s unaudited revenue and profit figures are actual as opposed to currency-adjusted, unlike reporting in previous years.
Rigotti said: ‘we have made lots of progress on our strategy and had successes but there are external headwinds out there which make markets difficult and there has been a high level of internal investment needs for us.’
‘Over the last couple of years we have opened ten offices, shut two.’ During the last financial year, the firm opened a new office in Kuala Lumpur and expanded its Alternative Legal Services business with new centres in Johannesburg, Melbourne and Shanghai.
In terms of practice areas, Rigotti highlighted the outstanding performance of HSF’s global disputes practice, which posted a 7% global revenue increase in what the firm described as its strongest year to date. It contributed around 40% of the firm’s global turnover.
Disputes in which the firm has led this year include the global insolvency of the Nortel Networks group, and representing RBS in its defence of the landmark 2008 rights issue claim brought by nearly 40,000 shareholder claimants, which settled in June.
Rigotti also emphasised the performance of the firm’s projects practice and its corporate practice, which advised on over 120 cross-border deals totalling in excess of $160bn. Some of the largest deals the firm acted on included advising Sky on its proposed £18bn acquisition by 21st Century Fox, as well as British American Tobacco on its $49.4bn recommended offer for Reynolds.
‘This is our fifth consecutive year of revenue growth. We have had a marginal decrease in profit. Part of that is due to external headwinds, part of it is due to planned internal investment cycle we are in. The net result – I would have liked it to have been better but I am still pleased.’
HSF was also appointed to a number of panels in the last financial year including British Land, Standard Life, Société Générale, BNP Paribas and Tata Global Beverages.