Turnover at boutique pensions firm Sacker & Partners has slowed after last year’s strong growth, with average profit per equity partner (PEP) dropping to 794,000, 16% less than the previous year.
This year, Sackers also recorded stagnant turnover and a 5% fall in net income from £13.3m to £12.7m. Revenue at the firm, which focuses on pensions and retirement savings, remained flat at £26.7m, as it was unable to match its previous year’s financial success.
In 2015/16, revenue at Sackers grew 13% to £26.8m, with the firm buoyed by major pensions restructuring mandates on behalf of clients such as Lloyds Bank, HSBC, John Lewis and ITV.
The figures revealed a significant fall in its partner top of equity figure. Last year, Sackers’ top earning partner earned £1.4m, dropping 21% to £1.1m this year.
The City-based firm attributed the reason for the substantial drop in PEP to a number of ‘planned’ partner retirements and associated payouts during the financial year.
Sackers senior partner Ian Pittaway told Legal Business that the firm had performed broadly as expected for the year, and said that last year was a ‘particularly good year’ compared to other years.
The next financial year would be more active for the firm, Pittaway said, after the UK government suggested enforcing greater pensions regulation after the collapse of BHS.
‘The increase in pensions regulation marks a big sea change from previous years’, he said.
Pittaway added: ‘Over a five-year period we have achieved steady growth. This year we were at more of a normal level, but we are on target.’
While the firm lost some partners through retirement over the financial year, Sackers brought in three new equity partners including the hire of RPC’s head of pensions Philippa Connaughton. This grew the total number of equity partners at the firm from 13 last year to 16 this year.
Turnover at UK boutique Sacker & Partners rose 13% to £26.8m last year as big corporates sought to restructure their pensions schemes.
Sackers, which counts Lloyds Bank, HSBC, John Lewis and ITV as clients, enjoyed a record year as revenue climbed £3.1m to £26.8m. Profits rose by 15%, from £13.6m in 2014 to £15.3m in the 12 months to 31 December 2015.
The growth was organic, with the firm employing 26 partners and 76 staff in both years. Ian Pittaway, senior partner at Sackers, told Legal Business: ‘It was a very good year. The general routine work was of a higher level and there were a few mega projects too. Generally the pensions world was pretty busy.’
The top earning partner at Sackers took home £1.45m in 2015, which is nearly £300,000 more than the previous year.
Pittaway added: ‘This is our highest ever turnover and it’s record profits too. Around £25m is usually where we aim to be. Our numbers are more steady than most of our competitors. The partners are pleased. It was a busy year.’
Pittaway said that while corporates are moving away from defined benefit contribution schemes, ‘it will be a 30-40 year runoff’. He added that this demand is being moved over to master trusts, an increasingly popular type of pension scheme that combined the pension arrangements for multiple employers, as ‘they are lightly regulated at the moment but are set to become more regulated and more complex’.
Other UK firms have posted more subdued results, as yesterday (28 June) Watson Farley & Williams and RPC reported single digit revenue rises up 5% and 6% respectively. However specialist firms like tech firm Osborne Clarke (OC) and private wealth firm Forsters have seen double digit revenue growth, with OC seeing global revenues up by 23% to €191.6m to €236.3m, while Forsters posted a 11.3% rise in 2015/16 to £46.2m.
LB 100 firms Shoosmiths and Sacker & Partners have unveiled their financial results for the 2013/14 year, with top 50 firm Shoosmiths recording a near 7% increase in revenue to £93m, while at City firm Sackers turnover is down by 2% to £23.8m.
Shoosmiths’ profit per equity partner (PEP) rose 21% to £290,000, putting it back on a par with figures recorded in 2011.
The results are an improvement on last year’s results, when the firm posted a 4% revenue uptick to £87m – albeit a 16% drop in revenue since 2008 – with PEP down by 20% to £239,000.
High profile mandates since last year included advising administrator Duff & Phelps on the administration of beleaguered shoe retailer Barratts. The firm also strengthened its medical negligence team last August with an eight-strong team from the now defunct Challinors, including the latter’s former head of clinical negligence, Richard Bannister.
City firm Sackers, meanwhile, has seen PEP come in at £741,000, marking a 5% drop, although the top of the equity received £1.1m.
The pensions boutique last year recorded flat revenues of £24.3m, moving it down four places in the LB 100 rankings to 98th position. Profit per lawyer last year saw a 6% rise to £272,000 while PEP suffered a 9% drop to £781,000.
The results follow that of RPC, which yesterday (21 July) revealed revenue growth of 3% to £84.1m – representing an upward trajectory for the City firm of 40% since 2011 – however partner profits slid by 6% to £26m. Profit per equity partner (PEP) came in at £338,000 for the period, a 9% drop on last year’s figure of £372,000.
A host of UK top 100 legal firms including Holman Fenwick Willan, Ward Hadaway, Gateley, Shoosmiths and Sacker & Partners have all reported revenue increases for 2012/13 amidst highly variable profit figures.
Top 30 UK firm Holman Fenwick Willan has seen its turnover increase by 13.8% at the 2012/13 year-end to £141m, while net profit jumped by 17% to £38m, up from £32.4m the previous year. However average profit per equity partner (PEP) at the 450-lawyer firm climbed by a modest 1% from £525,000 to £530,000, largely a result of the addition of 10 new equity partners over the past year, taking the total to 72.
Meanwhile national top 40 firm Shoosmiths has seen a slightly more modest 3% rise in turnover while PEP dropped 9.7% from £298,000 to £269,000 as the firm pointed to the rise in average equity partner numbers from 40 to 45 during the year. It was a year that saw the firm expand into Scotland through its merger with Archibald Campbell & Harley last autumn. The lion’s share of the firm’s revenue came from its disputes and corporate practices, which made up 30% and 22% respectively.
Elsewhere, top 50 full service national outfit Gateley enjoyed a significant boost in profits over the past year, with PEP up 22% from £214,000 to £262,000 while revenue rose 7% from £61.5m to £66m. The 462-lawyer firm opened a new office in Leeds in January 2012 and bulked up its City premises with a move to 1 Paternoster Square last October. The firm’s equity spread now ranges from £140,000 to £550,000, up from £104,000 to £400,000 at the 2011/12 year end.
Enjoying a double digit increase in turnover was top 90 firm Ward Hadaway, which today (11 July) posted a 10% rise in revenue from £30m last year to £33m while average PEP went up from £281,000 in 2011/12 to £322,000 at last financial year end on the back of ‘significant investment’.
The UK top 100 firm opened its main Manchester office in July 2012 and grew its private client services, which saw income jump by 64%. Corporate finance and commercial services saw their income grow by 36% and 14% respectively.
Jamie Martin, managing partner at Ward Hadaway, said: ‘The marketplace for legal services is becoming ever more competitive with new entrants coming in to the sector and existing firms ramping up their efforts to secure greater market share.
‘Combined with pressures on costs and the overall economic climate, it is a difficult market at the moment so we have done incredibly well to achieve double digit growth against such a backdrop.’
In a year that has seen boutiques flourish, pensions specialists Sacker & Partners saw its PEP dip by 11% from £860,000 to £765,000 following the addition of three new partners this year, which gives the top 100 firm 16.4 full-time equivalent equity partners. At the top of its equity the firm nonetheless enjoys profits more on a par with the Magic Circle; the highest earning equity partner at the firm took home £1.15m, up from £1.1m last year while at the bottom of the equity partners took home £362,000, 8% less than last year’s figure of £395,000. Turnover saw a slight increase up from £24m 2011/12 year end to £24.3m this April.