The University of Law has recorded a net profit of over £14m in its latest financial results, just a year after being purchased by private equity house Montagu Private Equity for £177m.
Accounts filed at Companies House reveal the UoL, formerly a charity, posted turnover of £53.3m over an 18-month period dating from February 2012 to July this year, alongside a retained loss of £7.7m which was attributed to investments made improving college facilities. The education body also paid zero UK corporation tax during this period.
When Montagu purchased UoL in November 2012, £114.5m of the £177m price tag was allocated to goodwill, covering the company’s ‘intangible assets’ that included its relationships with City law firms.
Prior to the deal, the UoL (then the College of Law) had invited around 20 organisations to submit initial information about their intentions for the business, followed by a bidding process which took roughly six months. It turned to longstanding adviser Allen & Overy (A&O) for legal advice during the sale, led by global corporate chair Richard Cranfield. Leading private client boutique Maurice Turnor Gardner, formed by ex-A&O partners, advised on spinning off the former charity, while Linklaters advised Montagu, with then private equity co-head Richard Youle at the helm. Ashurst corporate partner David Carter also advised the CoL’s management team.
However, the deal also created headlines for the wrong reasons, as it emerged that staff at the new university were taking home City-level pay packets. Current president Nigel Savage (pictured) enjoyed a wage increase from £270,000 in 2006 to £440,000 in 2009 – leading to criticism emanating from the legal press, with RollonFriday calling him ‘Nigel £440k Savage.’
Since then however, Savage has taken a pay cut and has received £260k for the last two years.
‘All the crap about my salary is [just] a manifestation of the tension of trying to run a business in a charity,’ Savage told Legal Business in June 2012. ‘We are not like bloody Oxfam or Shelter. I think that it’s those sorts of issues that meant we had to address our model to separate the business from the charity.’
Another legal education provider to receive a welcome boost of late is BPP, which was awarded university status in August. The decision made by the Department for Business, Innovation & Skills (BIS) to award the university title to BPP – which is the sole provider of the Legal Practice Course to many of the top City firms including Freshfields Bruckhaus Deringer and Slaughter and May – will elevate its standing globally.