Legal Business

Financials 2020/21: RPC latest to shrug off lean spell to post robust financial growth

Financials 2020/21: RPC latest to shrug off lean spell to post robust financial growth

RPC is the latest LB100 firm to emerge from a ‘very challenging’ period to today (22 July) post exceptional financial results for 2020/21.

The firm’s total revenue for the financial year 2020/21 was £136m, an increase of 23% on FY20 (£110.1m) and 26% on 2018/19 (£108m).

Meanwhile, its net profit margin rose to 35%, up six percentage points on FY20 (29%), while profit per equity partner increased to £634,000, up a striking 50% on the £424,000 recorded last year.

These latest results are significant uptick in performance following a lean couple of years in which the firm overhauled both its business lines and its equity partnership structure.

Managing partner James Miller (pictured) said revenue growth was evident across all offices  (London, Bristol, Singapore and Hong Kong) in the last financial year: ‘These results reflect just how unbelievably hard our people have worked over this past year, and in especially challenging circumstances for many of us and our clients. The numbers speak to our high-performance culture, unwavering commitment to clients and the quality of our people. While the news is undoubtedly very positive for our business, they are set against a backdrop of many people – and many businesses – experiencing a very challenging year; both professionally and personally.’

Miller also noted that the firm has continued to invest in developing and hiring new talent. This includes a commercial disputes team in Singapore acquired from Bird & Bird, as well as the hire of Tom Purton, Travers Smith’s former head of commercial, IP & technology, at the beginning of the year. RPC has also made up a total of 28 new partners in the last 15 months.

mark.mcateer@legalbusiness.co.uk

Legal Business

Sponsored briefing: RPC interview series – Andy McGregor

Sponsored briefing: RPC interview series –  Andy McGregor

Why are fraud disputes increasing year on year?

Numbers collected by the litigation intelligence company Solomonic show a dramatic increase: 94 fraud-related cases were recorded in 2020, compared with 61 cases in 2019 and 31 in 2018.

Based on our experience, 2021 is likely to see that number go even higher. It’s hard to know exactly what is driving that. I don’t think that we have collectively become worse people though.

Legal Business

Sponsored briefing: RPC interview series – Michelle Sloane

Sponsored briefing: RPC interview series –  Michelle Sloane

What advice would you give to clients who want to be prepared for potential investigations in relation to the criminal offences of failure to prevent the facilitation of tax evasion?

A defence exists of having ‘reasonable prevention procedures’ in place. Therefore, the first thing that I would advise is to ensure these procedures are in place. Despite the new laws on failure to prevent tax evasion being around since September 2017, quite a lot of corporates have failed to implement any procedures. These corporates will find it near impossible to mount a successful defence to these offences.

Legal Business

Sponsored briefing: RPC interview series – Simon Hart

Sponsored briefing: RPC interview series –  Simon Hart

To what extent is the current crisis similar to the 2008 financial crisis?

They are very different. Every economic crisis has different drivers, despite people tending to lump them together. The consequences for the legal market are always different as a result. Why? 2008 was a once-in-a-lifetime event, just like the pandemic, but of a different type. Undercapitalised banks themselves were one of the main causes of the crisis, they were right at the heart. The economy was on the precipice because the banks were so over-leveraged.

Legal Business

Sponsored briefing: RPC interview series – Jeremy Drew

Sponsored briefing: RPC interview series –  Jeremy Drew

How would you describe RPC’s retail offering?

Our retail group is one of the five strategic focuses of the firm. It sits at the very heart of what we do.

It’s one of the biggest and most comprehensive retail practices in the City. We have the necessary scale. There are more than 70 core people in the retail group, over 30 of whom are partners. We have intentionally kept a reasonably high partner leverage.

Legal Business

Legal Business Awards 2020 – TMT Team of the Year

Legal Business Awards 2020 – TMT Team of the Year

The entries have been assessed, the shortlists have been drawn up and our panel of general counsel judges have had their say: we are now delighted to reveal the winner of TMT Team of the Year for the 2020 Legal Business Awards.

The winner of this category has demonstrated market-leading commercial or regulatory expertise through its advice on a specific, IP, technology or media case or transaction.

 


 


Sponsored by

Winner – RPC

RPC’s TMT team, led by partners Mark Crichard and Charles Buckworth, advised LINK on the hugely-complex tender process for outsourcing all telecoms and technical infrastructure that sit behind its network (as well as the provision of settlement services) – a network that handles more than three billion transactions annually.

This was high-stakes, bet-the-company work. The tender requirement followed a mandate from the Payment Systems Regulator (PSR) that LINK run a competitive process for all its underlying switching and settlement technology and services, to ensure sufficient competition. Get it wrong and not only could that spell the end for LINK, but it could also create havoc for business and consumers.

RPC had to plan, construct and execute a competitive process that closely mirrored a public procurement, with all the stringent controls, processes and requirements for transparency and equality of treatment. This created a far-more challenging proposition in what was already a huge technology outsourcing.

RPC collaborated with LINK to draft contracts and run full, parallel negotiations with shortlisted bidders – while satisfying and reporting on complex regulatory requirements, many of which had never been translated into contract requirements before. In a standard outsourcing you typically only need to satisfy the client. But here, RPC had to meet competing demands of LINK’s regulators and obtain approval by over 35 stakeholders, including LINK’s card-issuing and acquirer members.

LINK had a regulatory obligation to complete the process on time or risk sanction by the PSR – so the clock was always ticking. Given the number of stakeholders – several outside the UK – and the novel elements to the deal, working closely as a team was critical. RPC helped LINK deliver the deal on time, to budget, against an extremely challenging schedule and intrusive regulatory oversight.

In the words of John Howells, LINK CEO: ‘We couldn’t have had better support from RPC in what was a critical and complex transaction. They really understood the commercial and regulatory drivers, delivering a service that was clear, commercial, focused and well-managed. What’s more, they were all a pleasure to deal with – good humoured to the end.’

Highly commended – Reed Smith

A Reed Smith team led by Michael Skrein achieved a unanimous Supreme Court win for BT and EE in a case concerning the allocation of cost liability for implementing orders for ISPs to block access to counterfeit websites.

This was a four-year legal battle that culminated in a ground-breaking unanimous 5-0 verdict by the Supreme Court judges. It overturned the Court of Appeal (which upheld the High Court), holding that luxury brands such as Cartier, and not the ISPs, must foot the bill for the costs of implementing orders for the ISPs to block access to counterfeit websites. Given the huge ramifications for intellectual property rights on the internet, this seminal case was watched closely all over the world.

Other nominations

Bristows

Leveraging its lengthy history and expertise in IP and technology, the firm was engaged by Genomics England, the body behind the 100,000 Genome Project, to help develop its PanelApp online tool.

Eversheds Sutherland

Succeeding through a competitive pitch to Orange Business Services, the firm advised the client on the development of its Information and Communications Technology Legal Certification Programme.

Gowling WLG

In a high-stakes patent dispute, involving only the second successful use of an Arrow Declaration, the firm represented GlaxoSmithKline in the High Court against Vectura, the UK-based drug formulation company.

Pinsent Masons

In a landmark case, the firm successfully represented ZyXEL Communications in patent proceedings involving the alleged infringement of two standard essential patents used in broadband technology.

Legal Business

‘On the front foot’ – RPC upbeat after holding steady amid year of change

‘On the front foot’ –  RPC upbeat after holding steady amid year of change

RPC posted muted revenue growth for 2019/20 following changes to the firms practice lines, its latest financial results reveal, while profit per equity partner (PEP) saw a slight dip. 

Turnover at the insurance and litigation specialist rose 1% to £110.1m, with the firm’s commercial & financial markets disputes, insurance, and technology & media practices among the primary drivers of growth as the financial year closed. PEP, meanwhile, fell 4% to £424,000, albeit after a striking 27% rise last year to £442,000 off the back of a contraction in the firm’s equity partnership. 

Revenue growth is slightly down on 2018/19 when the firm managed to increase like-for-like revenues 4% after recording its first full financial year since the selling of half of its management consulting arm. However, the firm reports that after removing its now departed UK construction & projects practice and Hong Kong marine practice from the equation, revenue growth for the past financial year is a pacier 7%.

RPC has undergone a series of structural changes in recent years. In addition to streamlining its practice and selling a chunk of its consulting business, the firm also announced in a surprise move last year it would be ditching its all-equity partnership structure to introduce fixed-share partners and salaried partners for the first time. Meanwhile, the firm also confirmed its new senior partner last month, with Oliver Bray assuming the role on a three-year term replacing commercial disputes partner Rupert Boswall. 

However, the firm shrugged off the uncertainty of 2020 to start the year in an expansive fashion, recruiting a new restructuring and insolvency team in London from DWF before promoting 15 partners globally in May an increase of six on last year. 

Attention will now turn to how RPC approaches the year ahead. Comments managing partner James Miller (pictured): ‘We finished the financial year very much on the front foot, and revenue generation levels have remained high during lockdown. Looking ahead, we have started the new financial year as positively as we ended the last one and I remain very optimistic that the future – despite considerable economic and political uncertainties and the challenges faced from Covid-19 – will bring exciting new opportunities with existing clients as well as new. 

thomas.alan@legalbusiness.co.uk 

Legal Business

Disputes perspectives: Geraldine Elliott

Disputes perspectives: Geraldine Elliott

I wanted a professional career. My father was a doctor but very keen I didn’t do medicine. I had a scientific background and law is a very analytical process. I’d watched a few television programmes about criminal lawyers.

Law was the right career for me. The life of doctors is very tough and there’s effectively one employer, whereas in law it’s easier for you to create a career because it’s constantly changing and there’s always something that can grab your interest. New people coming onto the market and changes in the competition make a massive difference.

Legal Business

RPC’s surprise partnership shake-up signals focus on next generation but is the firm still playing too safe?

RPC’s surprise partnership shake-up signals focus on next generation but is the firm still playing too safe?

Marco Cillario assesses the background to RPC’s decision to abandon all-equity structure

At a November press event held by a top-25 UK law firm, Legal Business was struck by a sudden spike in the guests’ interest in RPC. The 76-partner firm has long been a respected insurance and litigation business, and solid mid-weight operator, but not generally a firm to cause too many ripples of interest among peers.

Legal Business

RPC abandons all-equity structure in sweeping partnership shake-up

RPC abandons all-equity structure in sweeping partnership shake-up

Reversing a common trend among many City firms in recent years, RPC is to introduce the roles of fixed share and salaried partner for the first time in its history – a move the firm said reflected ‘changing expectations of people, market and client demand’.

However, the status of its current 76 equity partners will remain unchanged – the move only applies to future promotions and hires.

The UK top-40 firm announced today (19 November) it will move away from an all-equity partnership structure with immediate effect. ‘We’ve spent a lot of time listening to people’s expectations and considerations when it comes to their career progression; and listening to what’s happening in the wider market,’ said managing partner James Miller (pictured). ‘We’ve taken on board what we’ve heard and created a career structure that is right for our people and right for our clients, now and into the future.

‘Our all-equity structure has served us very well, but we know that the bar to achieving partnership here has been seen as very high. High standards are a good thing, of course, and that won’t change, but we saw the need to offer our people alternative career destinations with titles that reflect their seniority and value – value to clients and value to the business. These new roles give people a credible and recognisable alternative to full-equity partnership – if that’s the route they wish to take.’

The changes mean there will be five senior roles for lawyers at the firm: full equity, fixed share and salary partner, as well as of counsel and senior associate.

RPC has tightened its equity lately. It shrank its partner ranks by nine to 74 in 2018/19, resulting in a 27% growth in its profits per equity partner (PEP) to £442,000 in 2018/19, while revenue was £108.6m.

While a number of firms have in recent years have edged towards all-equity partnerships, RPC feels this approach tackles concerns in the industry around retaining senior associates and junior partners at a time when competition for talent is tough and several US firms offer quicker career paths to their lawyers. Kirkland & Ellis has long made a success of its strategy of promoting many associates to salary partner early before giving a selected few a shot at its tighter equity.

Miller concluded: ‘This new flexible partnership structure will broaden the pool of people we can bring in to the partnership to offer greater strength in depth for clients across our core areas of focus. The battle for talent is fierce. This new structure will help us to retain our best people, attract new talent, and deliver better outcomes for our clients.’

Marco.cillario@legalbusiness.co.uk