After having elected managing partner John Joyce (pictured) to help turnaround what had been a string of lethargic results following the financial crisis, Addleshaw Goddard has posted double digit revenue growth of 12%, up from £171m in 2013/14 to £193m for the financial year 2014/15, while profits per equity partner (PEP) are expected to return to 2012/13 levels.
The turnover rise takes revenue to its highest level since 2007/08 and just shy in nominal terms of the £195m it achieved then. While the firm’s PEP figure has yet to be released, it is expected to have grown faster than the 12% revenue rise, putting it past £437,000 – a figure that compares favourably with the £440,000 in 2012/13 and comes after last year’s PEP fell by 11% to £390,000. The results will also see larger pay packets for fee and non-fee earners at the firm, with a ring-fenced bonus pool for strong performers being increased up to fourfold.
According to Joyce, the 675-lawyer firm has also ended the year in a positive cash position for the first time since 2009. Speaking to Legal Business, Joyce said the revenue figure was at the top end of the firm’s expectations: ‘It is an awesome result – to quote our financial director. It’s not job done but it is the first step along the way. It shows we are on the right track. And it is not just in the numbers either, it is in the atmosphere within the firm and the general vibe around the offices is much more positive.’
Addleshaws best-performing service lines were corporate, commercial and litigation – which all grew in excess of 12%. A result which Joyce puts down to a general pick up in the market and the fact that the firm has picked up some big transactions particularly in top-end litigation. Joyce is confident that the result is also evidence that the ‘A Fresh Perspective’ strategy, rolled out in December 2014, is working.
‘I think the result is a mixture of both the strategy and the general market. Part of it is the strategy but in a favourable market which enables you to deliver better on it,’ he said. ‘It shows we have got ourselves back on a different trajectory than what we were. I would say that we have broken out of that decline spiral and therefore that should make us more attractive for people that want to come and join us. I think the other great thing about this year as well is the fact we ended it with cash at bank rather than debt.’
The results will go some way towards meeting the key financial performance targets put in place by the firm’s new strategy, including achieving at least £250m in fee income by 2017/18 with an equity spread of £300,000 to £1m, a 30% profit margin.
For more on Addleshaws’ new strategy and its impact see: Last orders – Addleshaws gets behind its new leader, but can it regain its form?