Weightmans managing partner John Schorah has slapped a £100m revenue target on the firm for 2016/17 after a year of underachievement, with revenue up just 7% in 2015/16 to £95m despite a major merger and a 19% tumble in profit per equity partner (PEP).
Revenue at the firm rose from £89.2m in 2014/15 to £95m in 2015/16. However, the results are largely underwhelming, given that the bulk of the increase came from its merger with Leeds firm Ford & Warren in July 2015. Ford & Warren was generating around £8m a year ahead of the merger, and Weightmans said at the time of the merger that the deal would create a firm with ‘combined fee income in excess of £100m’.
Schorah (pictured) told Legal Business: ‘Not going to beat around the bush – most of that [increase] came from the Ford & Warren merger. We didn’t have a full year of Ford & Warren – we only had 10 months as we moved them onto our systems in November and we probably lost a bit of productivity then. There was a bit of organic growth over and above that but most of the growth – about £6m – came from Ford & Warren.’
He added: ‘We’re looking at £100m this year. We’ve budgeted for less than that, but that’s our target.’
PEP at Weightmans, whose practice centres on defending medical and clinical negligence claims, dropped 19% to £231,000. This means partners at the firm on average took home £54,000 less than the prior year, when PEP stood at £285,000. It is the firm’s second year of falling partner profits.
Schorah said: ‘The main reason for reduction in the profit is that we did a one-off WIP [work in progress] adjustment. We revalued it and it’s nearly £1m [down]. We were clearing the decks if you like and we’ve taken a harder view on whether it’s realisable. There is more and more fixed fees, because fixed fees are a bigger part of the world.’
Weightmans, which now has 11 offices across the UK, will aim to reduce real estate expenditure over the coming years following a string of mergers to make it one of the UK’s 50 largest firms. With two offices apiece in London and Manchester, the firm aims to consolidate these into most cost-efficient single offices. London will be put into one office space in 2017 and Manchester will follow in 2018.