Firms ranked 26-50 in the Legal Business 100 – Macfarlanes, TLT and Watson Farley & Williams – have posted a mixed bag of financials for 2020/21.
Macfarlanes has enjoyed its eleventh consecutive year of revenue growth amid a double-digit profit uptick and profit per equity partner figures that again bely fears of pandemic reversals. The robust 10% turnover increase to £260.96m builds on last year’s 9.5% rise to £237.65m, while PEP increased 9% to £2.09m, continuing last year’s solid 10% boost to £1.91m.
The results announced today (27 July) also point to a 12% increase in operating profit for the 2020/21 financial year, only a slight dip on the increase of 14% to £126m last year. The firm said it did not reduce costs over the course of the year, in fact overall costs increased, so the results reflected growth in the practice.
Senior partner Sebastian Prichard Jones (pictured) told Legal Business: ‘The last financial year was a good year for the firm despite the challenges that were clearly evident. We were fortunate that activity levels remained strong across our three areas of business – transactional, disputes and advisory work. Thank you as always to the firm’s clients and to our dedicated people for achieving what turned out to be a good result.’
Earlier in July, Macfarlanes announced it would be retaining 22 of the 25 trainees qualifying in September, giving the firm an 88% autumn retention rate.
Jat Bains, graduate recruitment partner said at the time: ‘This has been an uncertain period for many but we have continued to invest in our trainees, knowing that an investment in our trainees is an investment in the firm’s future.’
The firm also said it was increasing base salaries for both newly qualified solicitors and trainees. First year trainees will take home £48,000, rising to £52,500 for second year trainees, while newly qualified lawyers will earn £90,000.
Fee-earners will also share in an uncapped firmwide bonus – this year paid at a level of 9.78% ignoring special Covid bonus payments – and are eligible for individual bonuses, which are not geared to hours worked. The firm said it expected newly qualified solicitors to earn in excess of £100,000 this financial year, taking into account all elements of their package.
In a similarly bullish vein, TLT has smashed through the £100m revenue barrier, posting an 11% increase in turnover to hit £110m to coincide with the launch of a new strategy that targets revenues in excess of £140m by 2025.
The 2025 strategy will focus on anticipating and delivering against future client needs, through initiatives such as its FutureLaw programme and the further development of legal and near law capabilities. Investment will continue across its seven sectors, which include clean energy; digital; financial services; leisure, food & drink; public sector; real estate and retail & consumer goods.
It will also aim to keep equality, diversity, inclusion and wellness at the centre of TLT’s plans as the core pillar of the strategy. As part of that, the firm points to a recent multimillion pound investment in its tech platform and offices to support a shift to fully flexible working.
John Wood, managing partner at TLT, reflected on a strong position in his first year in the role: ‘We’ve worked hard to help clients manage the uncertainty and continuous change, as well as constantly looking forward to the challenges and opportunities that may lie ahead for their organisations. Growth has been consistent across all our services, sectors and locations – although each of our sectors have faced very different challenges triggered by the pandemic and the ongoing disruption that it has accelerated.
‘Clients rightly continue to expect more from their lawyers and our new strategy is about meeting that need – whether through our legal advice, transforming how we deliver services or supporting clients with the wider macro issues they face as true business advisers. That includes providing non-legal support on both the sustainability agenda and how best to rise to the challenges all businesses face around EDI and wellness.
‘Pandemic aside, breaking the £100m revenue mark is another significant step forward in our journey of continued and sustainable growth. But, we aren’t even close to done yet and, with our new strategy, will focus on looking ahead and delivering an outstanding service for our clients.’
Highlights for TLT over the last year include being re-appointed to the Sainsbury’s legal panel and securing roles on the Vodafone legal panel and UK government’s newly established trade law panel.
Watson Farley & Williams also reported its financials today, with slightly less dynamic performance over 2020/21, with income declining by 1% to £177m and a 4% dip in PEP to £553,000.
In a joint statement, managing partners Chris Lowe and Lothar Wegener said: ‘We are satisfied with the result as we entered the last financial year during a strategic review of our core business aimed at consolidating and investing in our strategy of sector focus. As part of that, we have opened two new offices in Düsseldorf and Sydney, welcomed ten lateral partners and made significant investments in our workplaces and business functions across the firm.
We are already seeing the benefit of our strategic focus with a strong first quarter to the current financial year, building on the 5% growth we saw in the second half of the last year.’