Does abuse of tax rules for partnership require a major clampdown by the taxman? That’s the £300m question and the reason that the majority of large law firm partnerships in the UK are now facing an overhaul of the tax treatment of partners and retained earnings.
Tax specialists and legal finance directors are currently sizing up proposals from HM Revenue & Customs (HMRC) to change the treatment of members and retained earnings in limited liability partnerships (LLPs).
The stream of UK law firm job cuts continues apace as DWF, Hill Dickinson and Taylor Wessing have today (30 July) confirmed that recent redundancy consultations have resulted multiple job losses.
DWF, having completed five mergers in less than 18 months and with a remarkable 84% increase in turnover to £188m, has become one of the most closely watched national practices in the legal market of late. The expansion has led to some significant streamlining of the business however and the firm has confirmed to Legal Business it has cut 38 staff from its ranks following redundancy consultations that began in May.
While the post-Legal Services Act (LSA) shake-up moves far more slowly for barristers than their solicitor cousins, the Bar continues to modernise at its own pace with new conduct rules unveiled this month heralding significant reforms.
The Bar Standards Board last week unveiled its new code of conduct for barristers allowing self-employed advocates to conduct litigation for the first time and to form associations with non-barristers – two significant steps towards liberalising lawyer regulation.
It’s not as if anyone needs reminding that the legal market remains challenging, and doubly so for regional advisers. But driving home that point this month, Midlands-based Challinors has become the latest sizeable practice to call in the administrators after the failure earlier this year of Cobbetts and Scots practice Semple Fraser.
The Birmingham-headquartered adviser, which offers services in areas including disputes and private client, has filed a notice of intention to appoint Eric Walls and Wayne Harrison from KSA Group as administrators.
Top 25-firm Irwin Mitchell has today (26 July) posted strong revenue and profit growth for the last financial year, while Lawrence Graham (LG) has posted declining turnover for the third year running.
In its latest results for 2012/13, Irwin Mitchell’s turnover was up by 9% to £200.2m from £183.7m for 2011/12. Profit for the group as a whole is £19.1m, up by 3.1% on the previous financial year. The firm’s profit per equity partner is £619,000 – a 9% increase from last year’s £569,000.
Regulators are never popular but the Bar’s watchdogs have seen sustained controversy finally escalate into a court challenge to their procedures.
The High Court earlier this month heard a claim for judicial review of the Bar’s regulatory procedures related to problems with the Bar Standards Board (BSB) and Bar disciplinary tribunals identified last year.
It’s been another year of solid organic growth for stalwart Burges Salmon, with revenue, profit and profit per lawyer (PPL) all up 4% at the end of last financial year.
The UK top 50 firm posted its highest ever revenue figure of £73.7m, up from £71m at the end of financial year 2011/12, with net income up to £23.5m from £22.6m and PPL up to £76,000 from £73,000. Profits per equity partner are flat, at £420,000 this year. This follows a 7% increase in turnover during the previous financial year.
Even in an age in which corporate investigations have become some of the most sought after work for legal advisers, Ropes & Gray has secured a notable role with the US law firm instructed by GlaxoSmithKline (GSK) to lead an investigation into claims that some staff in the pharma giant’s Chinese operations engaged in bribery.
Chinese authorities have arrested four GSK executives, including senior Chinese legal counsel Zhao Hongyan, amid allegations that GSK staff have attempted to bribe doctors to use the company’s medication.
The latest results for firms in the second half of LB100 are a mixed bag, as Howard Kennedy reports inflated revenues reflecting its recent merger with Finers Stephens Innocent, Clarke Willmott posts a fifth consecutive year of falling revenues and Manches unveils a sharp fall in turnover and profit.
Clarke Willmott’s revenues edged down 1% from £33.5m to £33.1m, while profits per equity partner (PEP) is down 14% to £141,000 from £163,000. Top of the equity is £152,000, compared to £110,000 at the bottom.
‘Tesco Law’ is a phrase that, thankfully, is finally dying out as the reality of alternative business structures (ABSs) takes hold, but what it represents – big brands entering the legal market – has become truer than ever this month.
First there was Direct Line Group’s long-awaited announcement of its plans to set up a law firm and then it emerged the Stobart Group has added an ABS to its barrister service.
