Macfarlanes this week (24 June) reported that, while turnover jumped by 4.5% to a new high of £110m, its profits remained almost static, falling slightly from average profits per equity partner (PEP) of £1.125m last year to £1.1m.
Senior partner Charles Martin cited the firm’s investment in property over the period as a factor, as well as the wider impact of the credit crunch.
Meanwhile, LG saw its second consecutive year of falling partner profits, with PEP dropping by 3.4% from £445,000 to £430,000 for the last financial year.
The drop in profits came despite a 2.3% increase in turnover —taking revenues to £67.5m — with the firm’s largest practice area, real estate, badly affected by the downturn.
Dickinson Dees’ turnover increased by 7% over the last financial year to £60m. However, the firm’s volume business division — recently rebranded as D3 and including mortgage and conveyancing work — was hit by the economic downturn. Last November the firm announced that it was cutting 17 staff from its remortgage division.
Berwin Leighton Paisner, which has one of the strongest real estate teams in the City, also reported a 6% dip in PEP for the 2007-08 year, reversing years of strong growth.
The fall, which the City law firm attributed to recent investments, took PEP from £660,000 last year to £620,000 this year — despite a 10% increase in turnover, with billings hitting £186m.
The results follow news of redundancy consultations at firms with heavy property exposure including Howard Kennedy, which last week announced that up to 50 jobs could be cut as a result of its consultation.
Commenting on the potential job cuts, property partner Paul Springall told Legal Week: “Half of the practice is based on real estate. If there are fewer real estate transactions there is less work. The drop in figures is inevitable.”
Other firms announcing their financial results over the last week include top 50 duo Osborne Clarke and Burges Salmon, which both posted double-digit growth in revenues. Hill Dickinson, meanwhile, saw its revenues jump by 7% to £73.1m, but its profits remained flat at £310,000.
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