Dechert’s top earner took a 48% hit last year as the international firm’s operating profit fell by 17.5% in the year to 31 December 2020, figures filed after a troubling year have revealed.
The firm’s annual report and financial statements show that the profit attributable to the member with the largest entitlement dropped from £6.1m in 2019 to £3.1m in 2020, as total profits available for discretionary division among members fell from £45m to £37m.
Dechert’s operating profit in 2020 was £37.9m, down 17.5% from £46.1m in the previous year, while turnover was also slightly down at £112.1m from £116.2m in 2019.
The firm has faced some unwelcome headlines in the last year, with a number of high-profile claims brought against Dechert and some of its current and former partners.
A negligence claim brought by Kazakh-based mining company Eurasian Natural Resources Corporation against Dechert and its former head of white-collar crime Neil Gerrard was heard by the High Court earlier this year. During the trial, Gerrard was accused of leaking confidential information to newspapers and the Serious Fraud Office in order to provide the ‘fodder he needed to expand his investigation’, which is ‘vigorously denied’. A ruling is expected in the new year.
The firm and Gerrard – as well as former partner David Hughes and current partner Caroline Black – also face a claim from Jordanian lawyer Karam Al Sadeq for alleged responsibility for his arrest and abduction and for allegedly orchestrating his unlawful detention in Ras Al Khaimah, one of the United Arab Emirates.
The defendants vehemently deny the claims against them’and told the High Court earlier this month that whether Al Sadeq has been unlawfully detained or denied legal representation will need to be proved at trial, which is due to take place next year.
Al Sadeq’s lawyers Stokoe Partnership Solicitors are bringing separate proceedings against Gerrard and Dechert, and two private investigators, for alleged involvement in illegal hacking and data theft attacks. Gerrard and his former firm were added to those proceedings by consent in September and both ‘emphatically deny’ the allegations.
Dechert and Gerrard also ‘strenuously deny’ any involvement in the hacking of airline tycoon Farhad Azima’s emails, which were published online during his dispute with the Ras Al Khaimah Investment Authority (RAKIA).
Azima’s counter-claim against RAKIA was dismissed by the High Court, but his hacking claim was remitted to the High Court by the Court of Appeal earlier this year. His appeal against the finding that he committed fraudulent misrepresentation and bribery in relation to a settlement with RAKIA was refused and a decision on permission to appeal to the Supreme Court is pending.
In relation to claims against the firm, Dechert’s accounts state: ‘Provision is made on a case-by-case basis in respect of the estimated cost of defending and/or settling claims against the firm. Separate disclosure is not made of these claims on the grounds that disclosure might seriously prejudice the outcome of the claims.’