Legal Business

‘An element of the exceptional’: Simmons latest to post striking pandemic financials with double-digit revenue growth and soaring profits

‘An element of the exceptional’: Simmons latest to post striking pandemic financials with double-digit revenue growth and soaring profits

Simmons & Simmons managing partner Jeremy Hoyland said there was ‘an element of the exceptional’ in the firm’s financial results announced today (16 July), with revenue growing 12% to £437m and profits shooting up 35% to £171m.

There was also a steep increase in profit per equity partner, growing 30% to reach £980k. Overall, this year’s results far outstrip the unremarkable 4% revenue growth and 6% profit increase from last year , as Hoyland explained that the firm benefited from a significant boom in instructions due to the pandemic.

He insisted that the revenue came purely from client work, with costs actually up on the previous year. This was thanks to increased salaries and growing headcount, despite savings on travel and entertainment due to enforced home working. Hoyland (pictured) told Legal Business: ‘We advised clients pro-actively, but they also came to us for solutions and significant mandates at a time of crisis. All of our offices grew in revenue, with the UK having a particularly strong year.’

He accepted that the firm ‘would not grow by 12% again’ next year, recognising the one-off nature of the current results: ‘One of the benefits of being a lawyer is that people come to you in the bad times as well as the good – it has always had that countercyclical nature. There’s an element of the exceptional in the results, but if you look back at our last four or five years of results there is something of a trajectory.’

There was a significant increase of work in the firm’s ESG, asset management and TMT practices in the past year. But there was also considerable growth from Simmons’ flexible resourcing platform, Adaptive, which increased income by 30% during the year. Hoyland added: ‘It’s partner-led, in a way some competitors aren’t. We will certainly be looking to internationalise the business soon.’

Other highlights include the firm making 23 lateral partner appointments, and promoting 13 lawyers to the partnership. Six of the newly-promoted partners were women, exceeding the firm’s target of 40% female partner promotions per year.

In other results announced this week, there were mixed fortunes at Stephenson Harwood as the firm unveiled a 2% slump in revenue, slipping from £213m to £209m. However chief executive Eifion Morris was optimistic, reporting that the firm had actually finished 8% higher than budgeted, and profitability increased 13%.

However Taylor Wessing joined Simmons and Herbert Smith Freehills  in posting impressive figures this week, announcing a 12% uptick in UK revenue to £175.5m and a 23% increase in UK profits to £71m.

Tom.baker@legalbusiness.co.uk

Legal Business

Sponsored briefing: Implications of the FCA test case for contractual interpretation and broker claims

Sponsored briefing: Implications of the FCA test case for contractual interpretation and broker claims

The Supreme Court judgment in the Financial Conduct Authority (FCA) test case was a resounding victory for policyholders. Two potential unintended consequences of that judgment are considered here

Contractual interpretation

So-called ‘disease clauses’ provide cover for business interruption caused by the occurrence of a notifiable disease within (say) 25 miles of the insured premises. To many, the Supreme Court’s conclusion that such clauses cover losses from the Covid-19 pandemic is obviously correct.

Legal Business

Sponsored briefing: Post-Brexit cross-border disputes – what next?

Sponsored briefing: Post-Brexit cross-border disputes – what next?

Simmons & Simmons examine the existing European framework, the legal changes introduced by Brexit and practical points that parties will need to consider in the future when contemplating, or participating in, cross-border disputes between the UK and EU

Prior to Brexit, a robust legal framework existed which governed cross-border disputes between the UK and the EU. It provided for reciprocal enforcement of judgments, choice of governing law and jurisdiction clauses. However, following Brexit, this framework has fallen away and has not yet been replaced by any similar legislative arrangement such that many civil justice matters will now be governed by member states’ local law. As a result, and in the absence of any further agreement, Brexit may have significant practical implications
for how litigants conduct cross-border litigation.

Legal Business

‘Strong foundation’: Another year of steady growth as Simmons prepares for challenges ahead 

‘Strong foundation’: Another year of steady growth as Simmons prepares for challenges ahead 

Simmons & Simmons has recorded another year of steady growth, its latest financial results reveal, with all key financial metrics up as the firm readies itself for more difficult times ahead.

The firm’s financial results published today (24 July) show firmwide revenue rose 4% to £390m, a slow rate on last year’s 6% increase and a considerable drop from the firm’s 12% hike in 2018. Meanwhile, the firm’s overall profit stood at £126m, up 6% on last year and profit per equity partner growth surpassed last year’s figure, hiking 7% to £756,000.

While revenue growth has slowed for a second successive year, the five-year growth track is impressive: Simmons has added £100m to its top line since 2015, a 34% increase.

‘We have seen another year of growth and our financial and market performance continues to be strong,’ commented managing partner Jeremy Hoyland (pictured). ‘All our regions have achieved good increases in both profit and revenue as we continue to invest in the future of the firm, with continental Europe and Asia having particularly pleasing years. These results give us a strong foundation to weather the crisis and will help us navigate through the difficult times that no doubt lie ahead.’

The firm’s modest decrease in revenue growth was matched by fewer partner hires and promotions across the year. 2020 saw six partners made up at the firm, compared to a bumper round of 15 receiving the nod last year. Likewise, lateral hires were down, with 14 new partners brought into the firm compared to 16 the previous year.

However, in the New Law space Simmons has made significant gains. The firm’s flexible lawyering platform – Adaptive – has seen revenue jump 25% over the last two years, while last summer the firm made a surprising move in acquiring legal engineering start-up Wavelength .

‘The firm has maintained the focus on its four key sectors, which put us in a strong competitive position to develop our relationships with clients in these industries throughout the pandemic and as business recovers,’ Hoyland concluded.

thomas.alan@legalbusiness.co.uk

Legal Business

Sponsored firm profile:
Simmons & Simmons

Sponsored firm profile: <br>Simmons & Simmons

You cannot control the outcome of tax litigation and, in the current political environment, judgments can be hard to predict. We focus on the elements we can control.

Our approach is intellectually rigorous, to ensure all potential technical arguments have been evaluated and managed so there are no surprises at trial. We investigate thoroughly, then focus on meticulous case preparation and strategic planning.

Legal Business

Sponsored briefing: Tax disputes – Beyond Brexit

Sponsored briefing: Tax disputes – Beyond Brexit

Nick Skerrett considers the tax disputes and areas of controversy we are likely to see in the aftermath of Brexit

Given the tensions and uncertainty of Brexit, tax will inevitably be a key area of disputes for UK businesses trading internationally and for foreign firms trading with the UK.

Legal Business

More partner conferences suspended amid spike in coronavirus cases

More partner conferences suspended amid spike in coronavirus cases

Coronavirus is increasingly having its impact felt in the business of law, with Simmons & Simmons the latest firm to postpone its partner conference as the virus spreads across Europe.

In a statement, the firm said: ‘In response to the ongoing outbreak of coronavirus across parts of Europe and Asia, Simmons & Simmons has regretfully decided to postpone its partner conference until a later date. The firm believes that this decision will safeguard the health of employees across its international network.’

The conference was due to take place today (5 March) in Monaco over two days, however the increasing number of cases of coronavirus, also known as COVID-19, across Europe forced the firm’s decision. In the UK, there are currently 90 people confirmed to be infected with the disease.

Meanwhile, Linklaters too has had to suspend its partner conference set to take place in Berlin on 24 April. The firm is currently encouraging staff to work from home, and is replicating the measures taken in its Asia offices across its wider business. The gathering of its partners is now set to take place virtually.

Baker McKenzie was the first major firm in the City to be forced into a decision on coronavirus, closing its 1,000-employee office last week after a member of staff was taken ill following a return from Northern Italy, which has been heavily impacted by the virus. The office was reopened this week.

Latham & Watkins also had to take action, suspending its annual partner conference in New York citing safety concerns. Shearman & Sterling is another US firm that has taken measures, imposing a travel ban for China and Hong Kong, limiting non-essential travel to contaminated jurisdictions and putting in place remote working measures. Meanwhile, Dentons has temporarily closed its office within Wuhan, the epicentre of the disease.

Fears around the impact of coronavirus on businesses have proved justified in recent weeks. In February the US Stock markets suffered their worst week since the 2008 financial crisis, with the three main indexes falling by 10% or more.

thomas.alan@legalease.co.uk

Legal Business

Revolving doors: Simmons and CMS make City banking and pensions hires as Gibson Dunn bolsters its Paris bench

Revolving doors: Simmons and CMS make City banking and pensions hires as Gibson Dunn bolsters its Paris bench

In another muted patch for City laterals, Simmons & Simmons and CMS were the only firms to hire in London last week as Gibson Dunn & Crutcher recruited to its employment bench and HFW hired in Hong Kong.

Simmons has added to its international banking practice with the hire of Kirsty Barnes, Gowling WLG’s head of banking and finance in the UK.

With 20 years’ experience in the financial markets sectors Barnes has experience in leveraged and acquisition finance, real estate finance and corporate lending transactions.

Head of Simmons’ banking group Peter Manning told Legal Business: ‘Kirsty has done work for Barclays, Lloyds and RBS. She does work for a couple of private equity style funds and has done some leveraged finance work. All of those were really important for us. We thought she would be a good personality and cultural fit for us.

‘She’s very keen to move the practice forward and shares our vision on what that means. We remain committed to doing work for the traditional clearing banks as well as credit funds and the alternative lenders. We’re very much committed to changing the way we deliver our services,’ Manning added.

Meanwhile, CMS has hired pensions partner Tim Green from DWF where he was the national head of its pensions teams.

Green advises trustees, sponsors, government bodies and providers in all aspects of pensions law with particular expertise in retail, energy, nuclear, transport, public and charitable sectors.

Head of pensions at CMS Mark Grant told Legal Business: ‘Tim’s got a great track record of building a practice. We’re in growth mode and this is part of our national growth story. We’ve grown by 30% in pensions in the last two years and this is a continuation of that.’

Elsewhere, Gibson Dunn has hired Ashurst’s Paris former employment head Nataline Fleury to back its European strategy.

Fleury has a particular focus on employment law issues affecting restructuring transactions, acquisitions and disposals. Fleury will be joined by associates Claire-Marie Hincelin and Charline Cosmao, also from Ashurst.

Chairman and managing partner Ken Doran commented: ‘Nataline has strong credentials and is very well regarded in the legal and business communities.  We know her well as we have partnered with her on several client matters over the past year.  She is the perfect person to lead our effort to add a labour and employment capability to our thriving Paris office.’

Finally, HFW has hired senior corporate finance partner Wing Cheung in Hong Kong. He has defected from Locke Lord where he was the Hong Kong managing partner.

Cheung specialises in capital markets, M&A, private equity and other transactional work. He advises clients on corporate and commercial matters, including initial public offerings and M&A and has experience in regulatory enforcement and compliance.

Cheung’s hire is part of HFW’s expansion of its global corporate and finance practices. Earlier this year the firm launched a transactional practice in China and made hires including lateral hires in Hong Kong and Singapore.

Hong Kong office head Patrick Yeung said: ‘This is a major boost to our transactional offering in Greater China and the wider region. Wing brings a wealth of experience of high-end corporate finance, and has an outstanding reputation for his technical expertise and exceptional client service.’

muna.abdi@legalease.co.uk

Legal Business

Deal View: A niche within a finance niche gives Simmons that much-needed edge after years of drift

Deal View: A niche within a finance niche gives Simmons that much-needed edge after years of drift

While some law firms claim to be all things to all clients, for almost a decade Simmons & Simmons has focused its efforts with increasing rigour on a select number of sectors. Given its unhappy period of drift as a generalist corporate finance player, recent years have delivered far better results. And nowhere is that more in evidence than in its particular take on financial services.

Its importance is reflected in the numbers. Currently the firm has 117 partners across its financial markets practice, 63 of which are in the UK, while 40% (around £150m) of firm-wide revenue comes from finance. Even here the firm has often avoided too much business-as-usual work for banking clients – a certain route to poor margins – to zero in on funds, asset managers and more esoteric areas of regulation.

Legal Business

Simmons gets on the legal technology and data Wavelength with start-up acquisition

Simmons gets on the legal technology and data Wavelength with start-up acquisition

Simmons & Simmons has made a rare acquisition in the form of legal engineering start-up Wavelength for an undisclosed sum.

Wavelength – which claims to be the first Solicitors’ Regulatory Authority-regulated legal engineering business in the world – uses data science, technology and design to assist on projects in the legal industry. The acquisition will see Simmons look to expose the London and Cambridge-based team to its client base.

‘From our perspective, there’s a pressure from clients for law firms to change, and sometimes that can be difficult,’ Simmons managing partner Jeremy Hoyland (pictured) told Legal Business. ‘When thinking about our larger mandates and the work we do for institutional clients, these matters are increasingly challenging from a data and technology perspective.’

Wavelength is led by co-founders Peter Lee and Drew Winlaw, who had been lawyers at Bird & Bird and Taylor Vinters respectively before founding the company in 2016. A 27-strong team is now expected to move into Simmons’ offices in London, while the company’s Cambridge office will become a Simmons outpost for a Wavelength team.

One of the major projects Simmons hopes to deploy the Wavelength team on is the firm’s response to the replacement of The London Interbank Offered Rate (LIBOR), which acts as a benchmark for financial contracts worldwide worth over $350m.

‘For something like the replacement of LIBOR, if you don’t have a Wavelength-style skillset it would be difficult to have a credible offering,’ Hoyland added. ‘But to be honest, we are finding more opportunities all the time, just earlier I was with our regulatory partners and out of that there was an opportunity to look at deploying Wavelength.’

Lee, meanwhile, believes Simmons is the ideal fit for the company: ‘We always recognised we would have to scale up somehow. We’ve been working with Simmons for a bit over a year now and they have a great international spread and it’s a perfect fit culturally.’

In another significant acquisition, Thomson Reuters snapped up legal software provider HighQ last week as the company looks to make good on plans to bolster its cloud-based software products after selling its managed services arm to EY.

thomas.alan@legalease.co.uk