Know your numbers

Posted on |

When former Dewey & LeBoeuf partners blamed Citibank for not telling them about the dire state of the firm’s finances, they got short shrift. In today’s legal market, there’s no excuse for not scrutinising the balance sheet. Here’s LB’s definitive guide to all you need to know

When law firms fail, the fallout can be spectacular. Take the case of DLA Piper’s Berge Setrakian, a one-time corporate partner in the New York office of Dewey & LeBoeuf, who now finds himself on the hook for $3.5m that he has agreed to pay in return for being released from liabilities in the largest law firm failure in US history. His former colleague, white-collar defence attorney Ralph Ferrara (now at Proskauer Rose), will stump up $3.7m; M&A supremo Morton Pierce (now at White & Case) is set to pay $1.02m. The lesson: when things go wrong, partners get hit where it hurts. 

To avoid any costly surprises, it pays to know your firm’s balance sheet inside out. But many don’t.

Continue reading “Know your numbers”

Paul Hastings: Paul Who?

Posted on |

Ronan O’Sullivan joined the small London operation of Paul Hastings as a senior associate seven years ago; now he’s running the office. LB meets the man with plans to give the top-30 US firm the success it craves on this side of the pond

Paul Hastings’ Ronan O’Sullivan is an ambitious soul. Described by peers as ‘punchy and hard-charging’, the firm’s slick and charismatic London chair talks confidently about doubling the office’s 50-lawyer headcount in the next five years.

‘I think we’ve got to the stage in London where we are part of the community. We are doing very high-end work. The challenge for us is the next five to seven years,’ says O’Sullivan. ‘Doubling in size; that would be our expectation.’

Continue reading “Paul Hastings: Paul Who?”

Hedge funds: Get debt go

Posted on |

In the global financial crisis, the hedge fund industry lost about a fifth of its value. Now distressed debt in Europe is seen as the route to renewed wealth, and two law firms look set to dominate, again.

When the dotcom bubble burst at the start of the Noughties and the fantastic bull market of the previous decade shuddered to a halt, two little-known American firms in London cleaned up, big style. Cadwalader, Wickersham & Taft and Bingham McCutchen made hay a decade ago acting for bondholders on a wave of contentious restructurings that pitted American hedge funds against European senior debt holders. Ten years on, and some serious personnel changes later, they’re doing the same again.

Continue reading “Hedge funds: Get debt go”

Energy boost

Posted on |

Other practice areas may be having a tough ride but energy lawyers are flying. LB maps the trends driving the sector

There are many sectors of the economy that governments can afford to scrimp on when times get hard, but luckily for power, oil and gas companies, energy is not one of them.

Power is as vital to economic function as oxygen is to breathing; fuelling transport, communication, defence programmes and health services. In addition, the political and economic instability attached to the supply of oil and gas ensures that energy security continues to dominate national agendas.

Continue reading “Energy boost”

LB100 Scotland – Flying the Saltire

Posted on |

One firm in particular again stands out from the morass of misery that has beset the Scottish legal market in recent years, as it did last year: Brodies.

Brodies has recorded one of the highest real-term turnover increases this year in the entire LB100: up 16% to £42.8m, leapfrogging Shepherd and Wedderburn, which has remained static. This is no flash in the pan either: Brodies five-year revenue compound annual growth rate (CAGR) is 7%, easily the highest in the peer group and all achieved without a merger.

The firm is also highly profitable. Net income is up 30%, again the highest in the group, putting profit per lawyer (PPL) at a healthy £50,000.

Continue reading “LB100 Scotland – Flying the Saltire”

LB100 North – Northern Soul

Posted on |

The line-up of North peer group firms has changed again. Following the departures of DWF and Hill Dickinson to the Major UK group last year, Weightmans joins them after 2011’s merger with Mace & Jones and the acquisition of Vizards Wyeth’s insurance team propelled the firm’s revenues into the big league.

Last year Weightmans was already £10m ahead of its nearest rival, Pannone. This year it is over £30m. Keoghs now tops this group with revenues of £47m.

But even without Weightmans, there is still a large gulf between the top firms and those bringing up the rear in this peer group. Dickinson Dees is now the largest firm by fee-earners in the North and its revenues are up by a modest 1% to £46.1m. This means the firm has arrested a three-year slide in revenues but is still some 23% behind its 2008 peak of £60m. Its five-year compound annual growth rate (CAGR) stands at -4% – the worst in the group behind Cobbetts.

Continue reading “LB100 North – Northern Soul”

LB100 Central – Fighting Back

Posted on |

Two years of holding the dubious distinction of being the worst performing peer group in the LB100 based on revenue has acted as a call to arms to law firms in central England and Wales.

The past year has seen the region consolidate at a storming rate to reverse the slide, climbing above the South and Scotland peer groups.

Ipswich-based Birketts posted a 12% annual increase in turnover to £26.7m following its first full financial year since amalgamating with nine-partner Chelmsford outfit Wollastons in September 2010.

Continue reading “LB100 Central – Fighting Back”

LB100 South – Down South

Posted on |

The situation remains typically sluggish in the South, where firms continue to tread water as far as profits are concerned and struggle for market share in this hugely competitive region.

Yet again, most firms in this peer group suffered flat or declining turnover and many have reported falling equity partner numbers; both signs that, despite unmistakable optimism among lawyers, things are far from pre-crisis levels. Average revenue across the peer group is up just 1% to £29.5m, still down on the £33m average in 2008. Once again, this is the worst-performing peer group in the LB100.

Continue reading “LB100 South – Down South”

LB100 Major UK – Pairing Up

Posted on |

As far as merger headlines go, the Major UK peer group has had a bellyful over the past 12 months.

Even in a year where the LB100 has seen consolidation across the board, the UK’s leading national firms still stand out as the most acquisitive. It’s a trend driven by necessity.

On the face of it, the merger between insurance players Beachcroft and Davies Arnold Cooper (DAC) was probably the most high-profile union but although DAC Beachcroft saw turnover rise by a hefty 22% to £163.2m in 2011/12, its growth still didn’t top the group.

Continue reading “LB100 Major UK – Pairing Up”