What finer way to kick off the New Year than a stream of law firm limited liability partnership (LLP) accounts? The latest in a run of recent filings confirm the extent of the fall in profitability at Trowers & Hamlins, while Holman Fenwick Willan and Stephenson Harwood confirm revenue increases.
Trowers’ LLP accounts for 2012/13 show that the firm’s net income fell from £26.2m to £16.1m while operating profit was down from £28.4m to £18.8m. The firm said the sharp fall in profits was largely due to the cost of moving its new London headquarters. Its turnover also decreased by 3.6% to £78.2m in 2013 from £81.2m the previous year.
The firm’s overall staff count grew from 514 to 527 while fee earner headcount remained static with the highest paid equity partner taking home £411,002, down from £496,838 in 2012.
Moreover, the firm took out new loans and finance leases during 2013 totalling £5.8m compared to £785,000 in 2012. The firm’s cash position has weakened against the previous year, moving from a surplus of £8.17m to net debt of £5.19m.
The firm, which has in recent years had to weather a slowdown in its public sector practice and problems in its Middle East network, also today (3 January) confirmed that it was to close its Cairo branch, citing uncertainty in Egypt. Trowers’ Cairo managing partner Sara Hinton along with other fee-earners will join local firm Ibrachy & Partners and operate on a ‘best friends’ basis.
In contrast, at Holman Fenwick revenue grew to £141.4m in the financial year 2012/13, up from £124.2m the previous year, while profits also rose to £47m from £39.7m. The firm has been one of the most financially successful practices in the UK top 50 over the last five years, with revenues rising 82% since 2008.
The firm employed 445 fee-earners on average compared to 436 the previous year, while the overall staff headcount was slightly lower at 771 compared to 780 in 2012. Staff costs increased to £53.4m from £49.3m. The firm’s average number of members grew from 128 to 141.
The LLP’s bank borrowings totalled £16.1m compared to £17.8m the previous financial year.
Meanwhile, Stephenson Harwood’s revenue increased by 3.7% to £113.3m to £109.3m, after announcing a 2% growth in revenue from £110.2m to £112.3m in July. The firm told Legal Business the unaccounted £800,000 was due to subletting income.
The firm’s profit remained static against preliminary estimates at £36.8m. The figures come after the firm transferred to a LLP structure in March 2012.
Member headcount grew from 105 to 112, with the highest paid LLP member receiving £895,000, down from £910,000 in the previous year. Average fee-earner and support staff headcount also increased from 506 to 522 and 173 to 180 respectively with the overall staff increasing from 679 to 702. This led to staff costs rising to £41.4m from £39.6m.
The firm’s pension liabilities also grew firm £39.9m in 2012 to £47.6m while its pension deficit also increased from £4.8m to £6.6m. In addition, the firm has bank loans of £6.2m, which it will pay in 32 quarterly instalments of £200,000 until February 2021.