City firm Lovells has become the latest major firm to report a fall in profit per equity partner (PEP).

The 11% dip, to £585,000 in 2008/09 from £661,000 in the previous 12 months, came after national firm Eversheds reported a 27% fall in PEP earlier today. Last week, City firm CMS Cameron McKenna also reported a fall in PEP.

Lovells reported an 11% rise in turnover, from £479m to £531m in the year to 30 April.

Lovells managing partner David Harris said restructuring costs accounted for around a third of the firm’s reduction in profitability. He also pointed to exchange rate benefits from the euro and dollar, which boosted turnover by 10%.

Lovells’ European offices generated 43% of the firm’s revenues, compared with 42% in London – the first time its European revenues have outstripped its City earnings. Asia and Middle East income accounted for 10% of revenue and the US 5%. Corporate accounted for 29% of income; commerce and real estate 28%; finance 20%; and dispute resolution 23%.

Harris said: ‘Given the extraordinary market changes we have seen, we consider our performance to be a pretty respectable result. Our international reach and the breadth of our practice create a balance to the firm, enabling us to perform reasonably well in difficult market conditions.

‘Our performance this year is more significantly influenced by exchange rates, but even taking this into account we have still seen some revenue growth compared to last year.

‘During the year we experienced an increase in costs ahead of the increase in our revenue. This was mainly due to increased headcount, salaries and premises, and we have acted to reduce them and other areas of discretionary expenditure.’