Legal Business

Financial results 2013: BLP confirms bad year as revenues drop by 5%

It appears today (19 July) is a good day to try and bury bad news. With Dundas & Wilson earlier revealing significant falls in revenues and profit, Berwin Leighton Paisner (BLP) has confirmed suspicions that it has had a bad year: revenues are down 5% from £246m to £233m.

The firm has yet to announce profit figures but PEP is widely expected to be down substantially from last year’s figure of £660,000.

This performance in revenue contrasts with the 11% increase that BLP posted in turnover in last year’s LB100, against a 5% fall in PEP. The reduction in turnover this year has inevitably had a dramatic effect on profitability.

Underperformance and dwindling profits has led BLP to attempt to plug the leak by reducing its wage bill by 15% in recent months, recently cutting 102 jobs in May, with 58 legal staff losing their jobs along with 44 secretarial staff .

Internationally the firm has been expansive, opening in Hong Kong, Berlin, Frankfurt and Dubai since 2011 and recently winning approval to open an office in Beijing.

In April the firm revealed it had held back bonus payments to senior equity partners in March, which managing partner Neville Eisenberg said the firm expected to repay in June.

BLP has now stalled following a dramatic rise up the mid-tier ranks in the run-up to the global financial crisis. It looks as if Eisenberg’s latest term as managing partner could be his most challenging yet.

david.stevenson@legalease.co.uk

Legal Business

Why the Serious Fraud Office should now be left to get on with its knitting

Why the Serious Fraud Office should now be left to get on with its knitting

The Serious Fraud Office (SFO) is an organisation under pressure. Pressure from MPs over the severance packages of former executives, pressure after its annual report this week revealed that it has taken on and won fewer trials, and pressure to redefine itself within a highly politicised arena where it is an easy scapegoat for any number of financial ills.

First, the Public Accounts Committee (PAC) on Wednesday published its 10th report in relation to the SFO’s redundancy and severance arrangements, finding that former director Richard Alderman had undermined the reputation of the SFO while he was director between 2008-2012.

The report found that Alderman used around £100,000 of taxpayers’ money to cover the travel and hotel costs of former chief executive officer Phillippa Williamson. A further £407,000 was paid towards her pension without approval from the Cabinet Office. Alderman also signed off a special severance payment of £15,000 to Williamson and the former chief operating officer (COO) Christian Bailes to ‘avoid grievance action’ without taking Treasury approval.

Richard Bacon, MP of the Public Accounts Committee, said: ‘The reputation of the Serious Fraud Office has been undermined by a catalogue of errors and poor judgement and the morale of its staff has suffered as a result.’

Bacon welcomed the appointment of David Green as director in April 2012 and MPs have urged Green to request that the recipients of severance payments repay the money.

However, the SFO has already come under further scrutiny after its annual report this week showed the organisation spent more money on trials, recovered less, and won fewer of them over the past year.

According to the report the average cost of all cases rose to £839,000 from £669,000 in 2012 with just 12 trials taking place this year, down from 19 the year before. Twenty defendants were tried this year compared to 54 last year, from which 14 or 70% were convicted. However, the average sentence length increased to 71.3 months from 50.6 in 2012.

The results come in a year of major change for the SFO as it refocuses its efforts on bigger fry – higher profile, higher risk complex fraud, bribery and corruption cases – and its new investigations including those into Libor rigging (the organisation charged two brokers this week), Barclays and the collapse of London hedge fund Weavering Capital. Completed prosecutions so far include Asil Nadir, Achilleas Kallakis, Alexander Williams and Nicholas Levene.

Green said: ‘Much has been achieved during the year, and we believe that the SFO is firmly set on an upward trajectory.’

Berwin Leighton Paisner financial crime and investigations partner Aaron Stephens agrees. ‘The SFO is undergoing a huge period of transformation. They have some big cases – LIBOR, multiple bribery cases from the ENRC case to the Rolls Royce case – there’s a lot going on. I don’t think they deserve any criticism, they are doing the best they can with limited budget in a period where they have to rebuild. Their work will begin to payoff in the next years.’

There is a lot to be said for now giving the SFO the space to get on with its knitting, but in the current political climate that may be viewed as more of a luxury than a necessity.

jaishree.kalia@legalease.co.uk

Legal Business

102 jobs to go as BLP redundancy consultation concludes – 58 legal staff depart

Berwin Leighton Paisner (BLP) has confirmed that it has cut 102 jobs that were placed under review in May, with 58 legal staff and 44 secretarial jobs being lost.

Of those laid off, 84% took voluntary redundancy, reflecting relatively generous severance terms on offer. The redundancy review was announced on 14 May and lasted for 45 days.

The redundancy programme also included a number of additional business service roles although the 735-lawyer firm could not confirm the number affected. It said that a targeted 15% reduction in salary costs was achieved.

This year has seen a string of UK law firms announce sizeable job cuts including DLA Piper, Eversheds and Osborne Clarke. In addition, Weil Gotshal & Manges confirmed last week it was to cut around 170 staff in the first substantive package of job cuts seen this year from a major New York practice.

However, BLP’s cuts are among the deepest and have been met by surprise given the firm’s record over the last decade as one of the most successful players in the UK mid-tier. Though the top 20 UK law firm is yet to confirm its 2012/13 results, it is expected to announce that partner profits have fallen by over 35% against a broadly flat turnover. Rivals have blamed tough market conditions in its core real estate practice and over-expansion for its current woes.

Despite the run of job cuts, the last two weeks have seen a host of major UK firms unveil rises in income and profitability for the 2012/13 financial year.

david.stevenson@legalease.co.uk

Legal Business

Lawyers On Demand launches new pay-as-you-go model as demand increases for flexible staffing

Lawyers On Demand launches new pay-as-you-go model as demand increases for flexible staffing

As senior private practice and in-house lawyers increasingly turn to flexible staffing options to manage their costs, Berwin Leighton Paisner’s (BLP) Lawyers on Demand (LoD) has extended its offering in the marketplace by adding a pay-as-you go, remote services model.

The new service, LoD on Call, will operate alongside the firm’s existing secondment model, now rebranded LoD on Site, which launched in 2007 and spun out from BLP in June 2012. Both are aimed at helping corporates and law firms to cost effectively manage the inevitable peaks and troughs in workflow.

Under the LoD On Call model, lawyers, who typically have between five and fifteen years’ experience, will work on short term projects via the telephone or email on a pay-as-you-go basis. ‘There is a need for senior associates and that is where law firms have trimmed resources,’ said Jonathan Brenner, co-founder and director of LoD.

The group’s USP is the quality of the lawyers it offers, claiming in its online marketing that the pool of lawyers available to work in private practice on an interim or project basis has historically been of variable standard and quality.

Of the 120 lawyers working for LoD, Brenner said that they received ten times that amount of applications and have ‘very high standards’ for those who are chosen. ‘All the lawyers have big law firm backgrounds. We are right at the top of the quality chain,’ he commented.

There has been a marked increase in contract lawyers over the past few years as providers such as Axiom and Obelisk have seen an opportunity in marrying the needs of law firms to meet client demands to cut costs with the desire of a large number of highly qualified and experienced lawyers, including women who have left to have children, to work flexibly.

Other law firms to have rolled out similar services to LoD include Pinsent Masons and Eversheds, through their brands Vario and Agile, although most services currently offered by private practice are aimed exclusively at corporates, not other law firms.

LoD revenues reached around £9m last year and Brenner is keen to capitalise on its first mover advantage and push the business forward, commenting: ‘The rebranding shows we are still innovative. We’re developing a whole suite of services to cope with the demand.’

david.stevenson@legalease.co.uk

Legal Business

Redundancy announcements increase as top partners predict difficult H2 for UK firms

Continuing pressure on UK legal market threatens largest redundancy levels since 2009

The level of legal redundancies this year is on course to be the largest since 2009 as the number of law firms announcing job cuts grows and senior partners predict tough months ahead.

CMS Cameron McKenna, which launched a review of its UK and Central and Eastern Europe business in January, last month took the final decision to make 37 staff redundant. The news came as 330-lawyer, top 50 UK firm Trowers & Hamlins also announced in late May that seven employees – three secretarial staff and four fee-earners – had been made redundant, with the firm blaming continuing pressures on the UK legal market.

Legal Business

Redundancy round continues as BLP latest to announce fee-earner cuts

Berwin Leighton Paisner (BLP) has become the latest major UK law firm to announce job cuts as firms increasingly examine their business models in light of a sustained slump in market activity.

The top-20 City firm announced today that is has entered a redundancy consultation affecting around 58 legal staff, 44 secretarial staff and some business services staff, with a target reduction in salary of 15% in the latter group.

Last year the firm’s profit per equity partner dropped by 5% to £660,000 and BLP fell three places in the LB100 to 17, despite seeing a revenue increase of 11% to £246m.

In early 2012 BLP made a handful of high profile lateral hires including corporate M&A heavyweights David Barnes and Alan Paul from Linklaters and Allen & Overy (A&O) respectively. Elsewhere A&O partners Nomita Nair and Kyle Davies joined in Singapore and Moscow, and Mark Chan joined BLP’s Hong Kong office from O’Melveny & Myers as the firm boosted its international offering.

However, in more recent months the firm has focussed on consolidation, with the exception of hires such as Norton Rose corporate lawyer Julian Stanier in September 2012.

Neville Eisenberg, who was last year elected for a fifth term as managing partner, said: ‘As announced last year, we have been in a period of integration and consolidation after a number of years of high growth and investment. The decision to review a number of roles across our London office is part of a general review of our business to ensure that we are well positioned for the future.’

The firm completed a previous redundancy round in May 2009 – a year when many City law firms cut their numbers in response to the financial crisis – when it let 85 staff go, affecting corporate, finance, real estate and support functions.

This year, firms including Eversheds, Clyde & Co and Olswang announced redundancy programmes as the UK economy only narrowly avoided falling into a triple dip recession in 2013.

In January Eversheds announced a redundancy consultation affecting 166 staff as the firm restructured it UK real estate and company commercial practices and closed its Copenhagen office. It was the firm’s sixth redundancy round since September 2008.

caroline.hill@legalease.co.uk

Legal Business

Pinsents launches flexi-lawyer service for clients

Pinsent Masons is set to launch a contract lawyer service that will provide clients with access to lawyers on a temporary basis as and when they are needed.

‘Vario’ will offer in-house teams a group of freelance lawyers with a variety of experience to cover anything from fixed-term projects to maternity leave. The move follows clients’ increased demand for flexible lawyers and addresses the core issues of resource, cost and skills that often affect the in-house legal teams.

Pinsents partner Alison Bond, who heads Vario, said: ‘Clients are increasingly asking for access to flexible resources. However, we wanted to take the idea a step further and launch the next generation of this type of service.

Legal Business

BLP – Ten years gone

BLP – Ten years gone

Berwin Leighton Paisner is a decade old this year, a period marked by impressive financials, a revolving door of partners and tentative international expansion. LB assesses the firm ahead of its difficult teenage years.

Berwin Leighton Paisner (BLP) managing partner Neville Eisenberg is impeccably well prepared for our meeting. Next to his black coffee he has printed e-mails and details of the firm’s financials over the past ten years. In his soft South African brogue, his responses are polished and littered with management-speak. He gives nothing away. But one question gives him pause – when asked if he will stand for re-election next year, he hesitates before answering cautiously: ‘Obviously I’m thinking about it.’ However, he says it’s still early days.