Legal Business Blogs

Reed Smith’s City outpost delivers 12% profit surge as staff numbers lifted

Reed Smith experienced a double-digit surge in staff numbers across its largest Europe and Middle East offices last year as profits across London, Paris, Dubai and Abu Dhabi surged by 12% to £65m.

Companies House records for that group of offices, which includes its small Greek office in Piraeus, show a 6% increase in turnover for the 12 months to 31 December 2014.  Revenue rose from £145m to £153m. Over the past two years, income has jumped by 13% across the five offices to £153m from £136m in 2012. 

As a result, the number of employees across the region rose by 17% in 2014 to 605. The bulk of this hiring was on the ground, with just two extra partners joining the firm’s ranks to take the partnership number for this group of practices to 132. The number of fee earners increased to 342 from 308 in 2013.

While the US firm has predominantly focused on building out its City offering over the past five years, adding the likes of Travers Smith leverage finance partner Ben Davis and King & Wood Mallesons litigator Nick Brocklesby last year, the firm has invested heavily in Europe and Asia. Reed Smith launched in Frankfurt in June with seven partners from Mayer Brown; Orrick, Herrington & Sutcliffe; Willkie Farr & Gallagher; and Jones Day. In early 2014 the firm also opened a small office in Kazakhstan centred on attracting arbitration being sent to London.

How much the firm paid its highest paid partner across the UK, the Middle East, Paris and Greece stayed static at £2.27m after a sharp rise in 2013 that saw the region’s highest earner trouser an extra £300,000.

However, payments into the group from the parent firm in the US rose sharply last year, more than tripling in 2014 to hit £6.8m as the firm ploughed investment into the region. A spokesperson for Reed Smith said: ‘Reed Smith manage treasury on a global basis and payment from parent undertaking is simply the firm funding short term cash needs with advances from the US LLP.’

In March Reed Smith posted global revenues for 2014 up 7% to $1.15bn and profit per equity partner climbed 6% from $1.14m to $1.2m.