Finances: mid-sized City firms also enjoy healthy billing and profit increases in 2005 / 06

The 2005/06 financial year looks to have been another bumper one for the UK's commercial law firms, as the first seven major practices to publish their results reported healthy billing and profit increases.


National firm Eversheds forecast its strongest-ever set of results, with an anticipated 10% increase in profits driving average profits per equity partner (PEP) above £400,000 for the first time. The firm predicted annual revenues in excess of £320 million - a growth of 7% on the previous year.


David Gray, Eversheds' chief executive, commented: 'Having worked hard to strengthen our business base by improving our profitability and achieving our target profits per equity partner in excess of £400,000, we are now ready to implement strategic growth plans.'


As part of these plans, Eversheds announced last month that it is to move into new, larger London premises and ditch its modified lockstep in favour of a merit-based profit-sharing system (see [2006] Gazette, 27 April, 6).


Meanwhile Birmingham and London firm Wragge & Co also revealed record results as its turnover rose by 15% to £101.3 million, topping the £100 million mark for the first time. Profits per equity partner soared 27% to £390,000.


Wragges' private equity team delivered the strongest growth, with fee income up 54%, helped by headline deals such as the £322 million sale of Paragon Healthcare and a £180 million cross-border acquisition for support services business ADP.


Mid-sized City firms also saw double-digit increases in fee income. Turnover at Field Fisher Waterhouse hit £60 million - a hike of 15% on the precious year's £52.2 million, and PEP grew 19% to £466,000. These figures put the firm on track to meet its target of a £75 million turnover by 2008.


The growth was assisted by its appointment as sole legal adviser to the Home Office to deal with its identity cards programme, and its instruction to advise the BBC on the £166 million sale of BBC Broadcast to Macquarie Bank of Australia.


Managing partner Moira Gilmour said the figures were the result of a growth strategy focused on key clients, lateral hires and investment in people and infrastructure.


'We are putting in place the building blocks to become within a few years one of the leading mid-sized independent law firms in the UK,' she added.


At Charles Russell, a 153% increase in the value of corporate mergers and acquisitions handled and a doubling of the amount of international work done meant turnover grew by 16% to reach £58.2 million. London firm Lawrence Graham just failed to post double-digit growth, notching up an 8% rise in turnover to £66 million.


Elsewhere, Manchester headquartered Halliwells reported record turnover of £62.7 million, up 25% on 2004/05 and £2 million above its target. Provisional results for the firm, which has seen considerable expansion over the past 12 months, most recently merging with the insurance division of Manchester firm James Chapman, indicated its PEP remained solid at more than £400,000.


National firm Weightmans also posted a double-digit increase in revenue, with turnover up 20% to a record £37.5 million. Managing partner Patrick Gaul said there had been 'much promising diversification in a number of key markets'.