Recently formed national player Wragge Lawrence Graham & Co has unveiled the combined results of its legacy firms for the last financial year, having created a firm with £172m in revenues and £58.7m in profit, operating at a margin of 34%.
Revenue growth of the legacy firms was below average last year. Wragge & Co posted £121.2m in turnover for 2013/14, an increase of 1% on the £120.5m of 2012/13. Lawrence Graham, meanwhile, saw a 2% fall in turnover from £51.8m to £50.8m.
Profit performance was much stronger. Wragges’ net profit of £41.5m equated to a 9% increase in profits per equity partner from £338,000 to £367,000. Lawrence Graham achieved a significant reversal of a double digit fall in profits in 2012/13 by posting a net profit of £17.2m. Its PEP has subsequently increased by 60% on the £260,000 posted in 2012/13 to £419,000.
Commenting on the startling turnaround to its bottom line, Hugh Maule, former managing partner of Lawrence Graham but now head of corporate, finance and private capital at the new firm, told Legal Business: ‘The costs have been managed hard. That’s helped a significant reversal in terms of the profitability of the business during the year. There wasn’t any single item that dominated – in terms of operating to budget, we had better figures on every single line and the cost line from people, to IT, to HR – that accumulative effect was quite significant. Real estate was the driver for this year’s performance.’
The reversal is in part explained by the fall in profits experienced by Lawrence Graham in 2012/13, which the firm attributed to significant property costs from its More London HQ. This expense was addressed in the last financial year, with Bond Dickinson subletting 20,000 sq ft of space.
The renaissance of real estate work has also helped, with turnover across both legacy firms in this practice area increasing 15%. It now accounts for a third of the merged firm’s turnover, around £56m.
The firm’s chairman, Andrew Witts, said: ‘We have made a strong start to life as Wragge Lawrence Graham & Co and will continue to invest in the people, practices, sectors and locations that will take us forward. Both clients and our people are already experiencing the benefits that being a bigger and better firm can offer.’