Legal Business

Shoosmiths grows revenues 10% to pass £100m mark and return to pre-financial crisis high

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Financial results 2014/15 Shoosmiths
Shoosmiths grows revenues 10% to pass £100m mark and return to pre-financial crisis high

National firm Shoosmiths has returned to its pre-financial crisis highs, breaking the £100m mark in revenues for the 2014/15 financial year and profit per equity partner (PEP) jumping 44% to £416,000.

Turnover at the top-50 firm grew 10% to £102.7m, returning to the level recorded in 2007/08 when the firm posted revenues of £103.4m and building on strong results last year which saw a 7% increase in revenue to £93m with PEP up 21% to £290,000.

The regionally-focused firm has also revealed it has taken permanent office space in London’s Tower 42, as of today (13 July). The firm has ten offices in total including the Tower 42 base, with its remaining nine offices spread across the UK in Birmingham, Milton Keynes, Nottingham, Northampton, Thames Valley, Basingstoke, Southampton and Edinburgh.

The firm’s chief executive Claire Rowe (pictured) said the ‘stellar results’ boil down to the firm’s ‘sustained investment’ that has largely contributed to the firm’s growth in headcount. In the last three years, the firm appointed 46 new partners and increased its Birmingham and Manchester office headcount to 224 staff and 152 staff respectively. Shoosmiths also recently appointed its first non-executive director, Jeremy Horner.

‘We have also invested in various infrastructure and IT initiatives and these have been reflected in recent years’ accounts,’ said Rowe. ‘We have focused on building strong relationships with our clients and gaining a reputation for delivering quality legal advice which enables us to grow organically, particularly through recommendation.’

In April, Shoosmiths announced all its partners will move to an all-equity partnership from 1 May 2015 with 76 salaried partners becoming fixed-share, bringing the total number of equity partners to 126. Some 92% of the existing salaried partners chose to become members of the LLP as fixed share equity partners with the remaining 8% staying as salaried partners.

jaishree.kalia@legalease.co.uk

Legal Business

An opportunity to ‘get involved’: Shoosmiths to move to an all-equity partnership

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Partnership Shoosmiths
An opportunity to ‘get involved’: Shoosmiths to move to an all-equity partnership

National law firm Shoosmiths will move to an all-equity partnership from 1 May 2015 with 76 salaried partners becoming fixed-share – and bringing the total number of equity partners to 126.

Some 92% of the existing salaried partners have chosen to become members of the LLP as fixed share equity partners with the remaining 8% staying as salaried partners.

Speaking to Legal Business, Shoosmiths chairman Andrew Tubbs said the decision was part of the firm’s three-year strategy to drive growth: ‘Currently our strategy runs from 2014 – 2017 and the key focus of that strategy is growth. We have a strategy committee and any strategy document doesn’t just sit there as a bit of paper – it evolves. The proposal to move on this basis came out of that committee then it went to a debate with the current fixed share and full equity partners and was voted on in that forum.’

The firm then carried out consultations with its salaried-partner group with the leadership team making presentations around the firm’s offices before salaried-partners were given the choice to join the membership.

Tubbs added: ‘Any decisions that require ordinary or special reservations of the LLP – those partners will now be involved in voting in those decisions. Strategically for example – where we merged with ACH in Scotland in 2012 – that sort of decision would be an opportunity for all those members to vote and get involved in debate.’

Taylor Wessing announced last week it is also set to convert into an all equity partnership on 1 May following a lengthy review and partnership vote. While others set to make the move to all equity structures include Mishcon de Reya this autumn, where current equity partners will become ‘senior equity partners’ and junior partners will become ‘junior equity partners’.

kathryn.mccann@legalease.co.uk

Legal Business

In-house: Mercedes Benz appoints Nabarro and Shoosmiths to UK legal panel as WLG loses out

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Adviser reviews CMS UKShoosmiths
In-house: Mercedes Benz appoints Nabarro and Shoosmiths to UK legal panel as WLG loses out

Nabarro and Shoosmiths have secured a joint appointment to the legal panel of Mercedes-Benz UK following a competitive tender process, while Wragge Lawrence Graham & Co has failed to win a place.

Announced in a joint statement today (24 February), the appointment ‘allows Nabarro to build on a relationship of more than six years’ with the German automotive brand while Shoosmiths is a new addition to the panel.

The tender process was initiated by Mercedes-Benz group general counsel and compliance officer Jonathan Lipman, who joined the business in 2013 from PSA Peugeot Citroen, after former legal chief Iain Larkins left the role to found virtual commercial firm Radius Law.

Commenting on the panel, Lipman said: ‘We review our legal suppliers rigorously. The re-appointment of Nabarro is testament to the quality of advice and other support the firm continues to provide Mercedes-Benz. In appointing Shoosmiths, we are confident we have found a firm that will work effectively as an extension to our own team and look forward to working with them. The firms are expected to support us particularly in the areas of property, financial services, corporate and competition’.

The last review took place in 2009, with Nabarro and legacy Wragge & Co winning the two spots available while Shoosmiths and Pinsent Masons lost out.

Nabarro’s client relationship partner for Mercedes-Benz, Jonathan Warne, said: ‘We have worked closely with Mercedes-Benz for many years and have developed a deep understanding of the key commercial and legal issues and opportunities facing their business. We never take longstanding clients for granted, so we very much appreciate this opportunity to continue working with Jonathan and his colleagues for another three years.’

Robin Webb, Mercedes-Benz client partner at Shoosmiths, added: ‘We are excited to have been appointed to the Mercedes-Benz legal panel and are looking forward to working closely with the team. We take a very innovative and commercial approach to client service and will seek to develop efficient and collaborative solutions in conjunction with the business.’

Other in-house panel reviews of late include the UK legal arm of French insurer AXA, which is set to look at its relationships with Magic Circle and international firms to scope how effectively they can work for the company, and follows a review of the UK specific ‘business-as-usual’ panel which was cut from seven to two and now comprises Pinsent Masons and DAC Beachcroft.

sarah.downey@legalease.co.uk

Legal Business

‘We will undoubtedly face many challenges’: Shoosmiths commercial head Peter Duff set to take on chairman role after Tubbs’ 12 year reign ends

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Leadership Shoosmiths
‘We will undoubtedly face many challenges’: Shoosmiths commercial head Peter Duff set to take on chairman role after Tubbs’ 12 year reign ends

Shoosmiths chairman Andrew Tubbs is set to step down after 12 years with partner Peter Duff lined up by the firm to take over the role next year.

Duff’s new role will go into effect from 1 May 2015 for a three-year tenure, as Tubbs officially steps down at the end of April after completing four terms as chairman. Tubbs will continue to act as relationship partner for clients and will join the firm’s real estate team in Birmingham.

Employment partner Duff is currently head of the firm’s commercial practice group since 2009 after succeeding Claire Rowe who became chief executive. Duff joined Shoosmiths in 2004 and was promoted to head its national employment team within a year. Before Shoosmiths, Duff was at Baker & McKenzie for six years.  

Peter said: ‘As Shoosmiths continues to evolve we will undoubtedly face many challenges and choices; some of them internal and others driven by the rapidly changing external market.  As chairman, I will be helping the firm to take advantage of the opportunities that change brings.

‘In recent years, Andrew and our leadership colleagues have helped to reshape our business with great success and have had to take brave decisions along the way to become the integrated national firm it is today.  I wish to continue that journey when I take the reins next spring.’

Tubbs joined the commercial property department of Shoosmiths in 1986, and specialised in residential and commercial development acquisition, option agreements and property finance. He became a partner in 1989, before moving to a more management focused role as head of the firm’s financial institution’s division in 1994. 

Tubbs said: ‘I congratulate Peter on his appointment to lead the firm as chairman, alongside chief executive Claire Rowe. They will make an excellent team, and I am confident that Shoosmiths will continue to thrive under their leadership.’

Litigation partner Stuart Little will succeed Duff as head of the commercial practice group from 1 May 2015. Little specialises in commercial litigation and dispute resolution. He joined the firm in 1997 and became a partner in 2004.

jaishree.kalia@legalease.co.uk

Legal Business

Financial results 2013/14: Shoosmiths posts 7% increase in revenue to £93m as Sackers drops 2% to £23.8m

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Financial results 2013/14 Sacker & PartnersShoosmiths
Financial results 2013/14: Shoosmiths posts 7% increase in revenue to £93m as Sackers drops 2% to £23.8m

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.

Sarah.downey@legalease.co.uk

Legal Business

LLP latest: Shoosmiths, Morgan Cole and MMS see significant drop in highest paid partner as Charles Russell’s takes home 64% more

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Salaries Blake MorganMaclay Murray & SpensShoosmiths
LLP latest: Shoosmiths, Morgan Cole and MMS see significant drop in highest paid partner as Charles Russell’s takes home 64% more

The latest round of LLP accounts for 2012/13 has revealed that Shoosmiths paid £1.5m to acquire Scottish firm Archibald Campbell & Harley, while Morgan Cole’s highest paid partner took home £116,000 less, Maclay Murray & Spens reduced their borrowing despite a tough year and Charles Russell’s highest paid equity partner took home £234,000 more.

On merging with Archibald Campbell in October 2012, Shoosmiths acquired £1.77m of net assets, £1.47m of which was paid as a cash consideration, the UK top 45 firm’s first-ever LLP accounts show. The remaining £300,000 was collected by the end of the financial year.

The 418-lawyer firm, which incorporated as an LLP on 4 May 2012, with the business of its general partnership transferring to the LLP on 6 August 2012, saw its bank loans increase by 18% from £6.5m in 2011/12 to £7.7m last year, while other loans also increased from £1.7m to £2.6m.

Shoosmiths’ highest paid partner saw their earnings drop 25% from £375,000 in 2011/12 to £281,000 last year, as audited accounts also showed a drop in net profit of 12% during that period from £12.5m to £11m, although turnover increased 3.4% from £84m to £86.9m.

Elsewhere, at UK top 80 firm Morgan Cole the highest paid member of the equity took home almost 42% less at the end of the last financial year – £162,000 compared to £278,000 in 2011/12. The lowest paid equity partner also took home 35% less; £135,000 compared to £206,000 the year before.

This came as revenue dipped 8% from £36.6m to £33.7m, as profit dropped over 32% from £10.1m to £6.9m, which the Cardiff-based firm attributed to a one-off property charge which has now been resolved.

Meanwhile, Maclays has significantly reduced its borrowing despite seeing revenue and profits drop, with turnover down 12.6% to £40.8m last year compared to £46.7m at the end of 2011/12. Net profit was down 21.8% from £13.3m to £10.4m as the firm also reduced its headcount by 22 fee-earners and staff, as staff costs were cut 7.2% from £18m to £16.7m.

The Scottish market has been notoriously difficult but Maclays, which has seen its revenue drop by over 30% from its 2008 high of £61.1m, has nonetheless shaved its bank loan from just below £2m to around £1.3m in the last financial year.

The highest-earning partner took home £292,000, a 26% cut on £397,000 the year before.

The picture could not be more different at top 50 UK firm Charles Russell which, despite seeing turnover and profit increase only slightly, saw its highest paid partner take home £600,000, up from £366,000 in 2011/12, a 64% increase.

The 310-lawyer firm continues to pay off an £11m term loan taken in 2009 to refurbish its City offices, reducing its outstanding borrowings to £6.6m last year.

francesca.fanshawe@legalease.co.uk

Legal Business

In Administration: Barratts administrators instruct Shoosmiths as Blockbuster turns to Locke Lord

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Corporate Locke LordShoosmiths
In Administration: Barratts administrators instruct Shoosmiths as Blockbuster turns to Locke Lord

Beleaguered shoe retailer Barratts has gone into administration for the third time in four years, with administrator Duff & Phelps turning to top 50 firm Shoosmiths to advise as it reviews the company’s position and considers all options including a fire sale.

Shoosmith’s restructuring and insolvency national head James Keates and Manchester partner Sarah Teale are advising Duff & Phelps this time around, after Barratts, which has 75 stores and 23 concessions across the UK and Ireland employing 1,035 people in total, was left with no choice but to turn to administrators when a recent offer of £5m from an investor was withdrawn on 7 November.

The latest development follows Barratts’ administration last year, when Squire Saunders advised Deloitte, with Leeds head of restructuring and insolvency John Alderton taking the lead.

Barratt’s collapse comes as fellow high street retailer Blockbuster has also filed for administration again, with Locke Lord’s London office being instructed by joint administrators Simon Thomas and Nick O’Reily of Moorfields Corporate Recovery.

Locke Lord’s restructuring partner David Grant is leading the team working for the administrators, as Blockbusters goes into administration for the second time this year. Locke Lord were appointed after Blockbuster’s owners, TS Operations, announced its intention two weeks ago to take the company into administration.

In January, when Blockbuster first went into administration, CMS Cameron McKenna advised Deloitte’s joint administrators Lee Manning, Matthew Smith and Neville Kahn.

The US private equity firm Gordon Brothers Europe first rescued Blockbuster in March but failed to turn around the company’s fortunes.

david.stevenson@legalease.co.uk

Legal Business

RSM Tenon in administration as three UK firms carve out Challinors

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Strategic recruitment Baker TillyCartwright KingClarke WillmottShoosmiths
RSM Tenon in administration as three UK firms carve out Challinors

The break-up of debt-laden Midlands firm Challinors took a ‘hunter turned hunted’ twist yesterday afternoon (22 August) after administrator RSM Tenon announced its own debt driven acquisition by rival Baker Tilly.

RSM was appointed in July to oversee the sale of Birmingham-headquartered Challinors’ business, and earlier yesterday announced the sale of parts of the law firm’s commercial litigation, medical negligence and family law practices to Clarke Willmott, Shoosmiths and Cartwright King respectively.

But in a mirror of its professional negotiations, the 35-office troubled accountancy firm was in crisis talks with Tilly and, like so many of the companies it advises, was forced into administration after Tilly pulled out of those talks.Tilly yesterday snapped up its rival in a pre-pack deal, advised by Stephenson Harwood corporate partner Andrew Edge and insolvency and restructuring partner Susan Moore. RSM Tenon was advised by Macfarlanes company law partner Matthew Blows alongside senior counsel Will David and Mark Slade.

The deal will save 2,300 of RSM’s employees but realise no value for its shareholders, including Lloyds Banking Group, advised by Hogan Lovells, which will be left with losses in excess of £80m.

Challinors, meanwhile, has not had the fortune of a wholesale buyer but continues to be broken up following the sale of its personal injury caseload to SGI Legal at the start of the week.

Yesterday it was announced that Clarke Willmott has taken ten members of Challinors’ private client and commercial litigation team into its Birmingham office, while Shoosmiths has strengthened its medical negligence team with eight new appointments led by Challinors’ former head of clinical negligence Richard Bannister. Meanwhile, Cartwright King has hired eight members of staff to join its Birmingham office, the majority of which are family law specialists. The latter group are to take ‘all of their cases with them to Cartwright King,’ according to a firm statement, and will be led by director of the family law practice, Fiona Lazenby.

Stephen Rosser, chief executive at Clarke Willmott said: ‘Growing our Birmingham offering is part of our three year strategy. Our main priority is to ensure a seamless transition for Challinors’ clients and we will be working with the administrators and Challinors’ partners in order to achieve this.’

Shoosmiths head of private client Richard Follis added: ‘This is an important and very experienced team, and their joining demonstrates Shoosmiths’ commitment to this challenging and highly specialist field of work.’ Already we have five medical negligence partners with more than 110 years’ experience between them. There is no substitute for experience in this work and this addition to our team adds breadth and depth to our national offering.’

On 20 August SGI Legal became the first to announce it had bought the personal injury caseload of Challinors for an undisclosed sum – the firm’s first acquisition since it became an alternative business structure on 1 August. However the firm also announced that it had not taken on any members of staff.

sarah.downey@legalease.co.uk

Legal Business

Retention round up: mixed bag as Shoosmiths, Dentons, Taylor Wessing record reduced rates

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Associates DentonsShoosmithsTaylor Wessing
Retention round up: mixed bag as Shoosmiths, Dentons, Taylor Wessing record reduced rates

Following last week’s round of positive trainee retention rates within a mix of Magic Circle, international and regional firms; the latest batch of results has revealed a substantial reduction in the number of newly qualified lawyers offered a position at their respective firms.

It’s bad news for the junior lawyer at Shoosmiths as the national firm announced yesterday (7 July) that it will only retain 41% of NQ trainees. Out of a cohort 22, nine out of 11 trainees have so far accepted jobs while out of the remaining 13 newly qualifieds (NQs), seven have been offered jobs at other law firms, and one will return to a non-legal career.

It follows the release of top-40 firm Shoosmiths’ financials which illustrated a modest 3% rise in turnover while PEP dropped 9.7% from £298,000 to £269,000. The firm attributed this to the rise in average equity partner numbers from 40 to 45 during the year.

A spokesperson for Shoosmiths said: ‘Because our trainees are recruited so far in advance, it’s always difficult to predict exactly what our requirements will be at qualification time.

‘Continuing economic uncertainty makes that doubly difficult, and unfortunately we have fewer vacancies at this point in time for newly-qualified solicitors than trainees. We’re hoping more vacancies will become available between now and September, should the economy pick up. In the meantime, we will take all the steps we can to provide support, guidance and help to those trainees still looking for an NQ role.’

Newly merged Dentons has also posted a modest retention rate compared to its peers so far, of 68%. Of its 25 trainees, 17 accepted offers while three were unsuccessful and five chose not to apply.

The low numbers follow the release of the entity’s first financials last month. Publishing broadly flat figures since combining SNR Denton, Salans and Fraser Milner Casgrain, the results equated to a combined total turnover of £829.7m, in the top 20 of global law firms in terms of turnover.

Top-20 firm Taylor Wessing also announced its retention rate this week, posting a 70% retention rate out of a cohort 23, making disappointing reading on last year’s figure of 86%. This year, three chose not to apply and the 16 out of 20 that did were successful, equalling a retention rate of 86% from that perspective.

‘We always try to retain as many NQs as possible,’ said graduate recruitment partner, Tim Worden. ‘Having trained them, we expect them to be first-rate associates with good prospects for continued career growth at Taylor Wessing. It’s obviously disappointing that our retention rate isn’t as high this year.’

‘Every year we try our best to match the needs of our various practice areas with the areas into which our trainees wish to qualify, but it’s not always easy to find the perfect match. We hope our retention will be back up to normal levels again next year.’

Those results follow the firm’s announcement last week where a recent redundancy consultation resulted in 22 secretary job losses.

In contrast, City firm Nabarro posted an 83% retention rate across its London and Sheffield offices. It’s a significant boost on the firm’s ranks last year which equalled a 69% retention rate last September. Out of 18 that applied this time around, 15 offers were made and all applicants accepted.

Jane Drew, head of graduate recruitment at Nabarro said: ‘We are pleased that all 15 of our offers have been accepted this year and our retention rate has improved after a blip last year. We put a lot of work into the selection process for our trainees and it is always rewarding to welcome such high quality new lawyers to the firm.’

Elsewhere, SJ Berwin, which recently confirmed a ground breaking union with Asia powerhouse King Wood & Mallesons, unveiled an 88% graduate intake for September 2013

Out of 16 applicants, a total of 14 trainees accepted newly qualified roles with the firm, illustrating a 10% improvement on the firms’ Spring retention rate of 78%. The overall retention rate for this year was 83%. To date, 96% per cent of trainees have accepted roles with the firm.

Nicola Bridge, training principle at SJ Berwin said the firm was ‘impressed at the level of talent this year,’ while its continually ‘high’ retention rates ‘demonstrate that SJ Berwin remains an attractive option for trainees.’

Sarah.downey@legalease.co.uk

Legal Business

Host of top 100 firms disclose increase in turnover as profit proves a more variable metric

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Financial results 2013 GateleyHolman Fenwick WillanSacker & PartnersShoosmithsWard Hadaway
Host of top 100 firms disclose increase in turnover as profit proves a more variable metric

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.

 

francesca.fanshawe@legalease.co.uk