Herbert Smith has unveiled a record-breaking financial year, with profits per equity partner (PEP) smashing the £1m barrier on the back of a 25% surge in turnover.
Revenue at the City heavyweight jumped by a quarter, from £334m in 2006-07 to £417.5m for the most recent financial year.
PEP, meanwhile, also grew by 25% from £820,000 to £1.02m, making Herbert Smith just the seventh firm in the Legal Week Top 50 to break the £1m barrier alongside the magic circle giants and rival City firm Macfarlanes.
The results represent a major turnaround from last year’s performance, when Herbert Smith saw PEP dip by 2.5% against a rise of 12.8% in total revenue.
A spokesperson for them firm confirmed that all practice areas comfortably exceeded their target revenues, while Dubai was singled out as a strong performer in the first year since the office’s launch. Moscow and South East Asia were also cited as having performed well on the international stage.
News of the record profits and turnover comes after Herbert Smith last month (30 April) announced that it was freezing its associate salaries at last year’s levels.
Meanwhile, Norton Rose today (13 May) posted a 23% rise in turnover for 2007-08, jumping up to £297m. PEP at the top 10 City firm has yet to be announced.
Taklback: Is Herbert Smith any nearer breaking into the magic circle after these results? Click here to have your say.
More news, deals and comment on Herbert Smith
Herbert Smith on the Legal Week Wiki
It is no nearer to being a Magic Circle firm I am afraid than it was. Herbert Smith's finance teams are a long, long way behind the Magic Circle's and the credit crunch will set them further back because they will suffer from the "flight to quality". The corporate team is closer but still doesn't quite get there. And the international offering with Stibbe etc is an ineffective bodge. However, that doesn't mean it isn't a great financial performance. But maybe Guy Beringer was right and PEP isn't everything? If it were, maybe Herbies wouldn't care so much about being let into the club.....
I'd be a lot more impressed if they hadn't simultaneously frozen their pay bands.
As demonstrated by Macfarlanes, high PEP isn't exclusive to the magic circle - congratulations to Herbert Smith on the impressive numbers, but MC it still aint...
PEP continues to rocket amongst the city firms, but lawyers' wages don't. They say the markets are tough and lawyers are overpaid. The sums don't add up.
So partners at Herbies are earning 25% more than they were last year, an average of around an extra £200,000 each on top of the £800,000 they were already earning. Many, many congratulations. Now, explain to me again why they can't raise associate salaries by a few grand? Oh I see, because it might mean them only taking home £180,000 extra this year. Got it.
Related Articles
Latest Jobs
