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Growing pains as revenue and profits take a tumble at Ashurst

Ashurst has revealed a drop in both firmwide revenues and profits per equity partner (PEP) following a ‘year of consolidation and significant investment’, including a global strategic review.

Revenues came in at £561m, down by 4% from £568m in the 2013/14 financial year, while PEP at the firm was down 7% to £747,000 – a sharp drop on the previous year when PEP stood at £801,000.

The firm said it had seen ‘robust performance’ in Asia Pacific, the Middle East, France and Spain, and increased activity in the resources, infrastructure and finance sectors.

‘It has been an interesting year with lots of political and market volatility in different parts of the world,’ Ashurst chairman Ben Tidswell (pictured) told Legal Business. ‘We had a strong first half of the year and this ebbed and flowed more in the second half as that volatility affected business confidence.’

The firm said these results came as no surprise given that the last 12 months was a year of investment, including the implementation of a new business strategy. According to the firm, ‘on a like-for-like basis’, with figures adjusted for movement in exchange rates, revenues are up 1% from £558m last year, while PEP is down 4% from £775,000 in 2014.

‘Results this year are in line with expectations, with revenue remaining consistent with FY14,’ said managing partner James Collis. ‘We have been through a year of consolidation and significant investment in the future performance and success of the business. In the last twelve months, we have undertaken a major global strategic review with Bain & Co which we are now implementing. We are already starting to see benefits at this stage despite this being a long-term strategy. We have also made significant investment in the infrastructure of the business and technology to support and drive profitability.’

The firm called in blue-chip consultant Bain & Co early last year to offer advice on business strategy, data analysis and client development. It was also asked to assess how the firm can polish its client service and improve cross-border working and was charged with evaluating Ashurst’s business in areas including private equity, oil and gas and infrastructure.

In May this year, the firm made a rare lateral hire from Freshfields Bruckhaus Deringer in London, bringing in country partner for Australia and co-head of mining and metals, James Wood, to bolster its corporate division.

But Ashurst has seen some sizeable team exits this year including last week a nine-lawyer team exit from its US offices, including its US managing partner, to join Paul Hastings. In June, a four-partner team left to join King & Spalding in Tokyo.

Nevertheless the firm did score some key mandates this past year, including advising on the $2.8bn financing for the Donggi-Senoro LNG project in Indonesia; representing Bank of America Merrill Lynch on Shell’s £47bn offer for BG group; acting for ITOCHU Corporation’s HK$80.3bn investment to acquire a 20% strategic stake in CITIC Limited; and advising on Novion Property Group’s A$11bn merger with Federation Centres.