The difference a decade makes
It’s financial results season and the figures from the top 50 firms are slowly coming in. For the next few weeks, we’ve decided to run a series of articles in which we compare this year’s results to those posted by the same firms ten years ago, in 2013. This should provide an interesting analysis of how the legal sector’s biggest players have performed across a decade that, one could argue, has seen unprecedented turbulence: the aftermath of the financial crisis, Brexit, the pandemic and the war in Ukraine are just some of the major challenges law firms have had to navigate in the past ten years, not to mention the ongoing digital revolution, rising inflation and an evolving regulatory environment.
At the time of writing, the majority of the top 50 have yet to publish their results. But we do have a few figures we can bring you, and – where available – will give you the revenue and PEP figures in accordance with the respective firm’s 2013 ranking by revenue size.
Back in 2013, Magic Circle firm Allen & Overy sat in 4th place on the list of top 50 firms. It achieved this courtesy of £1.189bn in revenue. Ten years later, this figure has grown to an eye-popping £2.1bn, a 76.6% increase. And average pay per equity partner (PEP) has grown from £1.1m to £1.82m, a rise of £720,000. Very respectable growth figures indeed.
Simmons & Simmons, a member of the Silver Circle, occupied 13th place in the 2013 league table. That year, the firm posted revenue of £250.3m and PEP of £525,000. Fast forward to 2023, and Simmons & Simmons has more than doubled its revenue at £521m. PEP has also seen a hefty increase over the past decade, and now stands at just over £1m (£1,001,000, to be precise). I’d call that a good result.
Coming in at number ten in the top-50 ranking in 2013 is Eversheds, which has posted global revenue of £730.9m in the year to April 2023; in 2013, the firm generated £376m in revenue. This means that over the past 10 years, the firm has managed to almost double its revenue, with an increase of £354.9m since 2013. Over that same period, PEP has risen from £642,000 to £1.29m – it has more than doubled, in other words, with an increase of £648,000. Not too shabby at all.
Silver Circle firm Ashurst, 13th in the 2013 ranking, has also had a pretty stellar decade. In 2013, the firm’s revenue stood at £323m; this year, the figure stands at £879m, not too far off from triple the amount from 10 years ago (×2.72, to be precise). PEP at Ashurst has seen a comparatively more modest increase, from £680,000 to £1.17m, a rise that represents the best part of a half a million pounds at £490,000. Not as big a pay bump as the equity partners elsewhere, but also not pocket change by any means.
A little further down the 2013 table is Holman Fenwick Willan (HFW), taking 24th place. That year, HFW posted revenue of £141m, and PEP of £530,000. In the intervening decade, revenue has risen by £84.3m to £225.3m, and PEP by £256,000 to £786,000. That’s a hell of a good ratio of PEP to revenue, I would say, and another solid decade of growth to be proud of.
Coming in 31st place in 2013 with £112.2m in revenue and PEP of £450,000, we have Stephenson Harwood. For this past year, the firm generated £228m in revenue, and posted PEP of £725,000. That means that Stephenson Harwood has managed to more than double its revenue over the past ten years, with an increase of £115.8m. And PEP has risen by £275,000. That’s some very good going.
In 34th place for 2013 is Taylor Wessing, with revenue of £104.5m and PEP of £544,000. In 2023, the firm’s revenue has grown to £227.1m, and PEP to an estimated £809,000. That’s an increase of £122.6m (more than double) and £265,000 respectively. Another strong set of figures.
Last but by no means least for this week, we have Osborne Clarke (OC), which stands in 36th place in the 2013 league table. That year, the firm posted £97.3m in revenue and PEP of £350,000. Ten years later, revenue has grown to £217.3m, which is a whopping 123% increase, while PEP stands at £687,000 an increase of 96.3%. That is some very healthy growth during an oftentimes turbulent decade.
More results will follow next week.
Allen & Overy’s managing partner quits ahead of merger
Back in May, it was the story on everyone’s lips (well, everyone au fait with the legal sector, at least): the announcement of the proposed merger between Magic Circle firm Allen & Overy (A&O) and US bluestocking firm Shearman & Sterling. Set to be voted on by the firms’ respective partners in September and October, this deal would create a legal behemoth employing over 4,000 attorneys across 49 offices, with a projected combined revenue of $3.4bn.
And now, the story is back on everyone’s radar following the shock announcement on Thursday that A&O’s global managing partner Gareth Price has exited the firm ahead of the partner vote this autumn. The revelation came courtesy of A&O’s financial results, where Price’s exit was announced – along with the news that A&O’s revenue has surpassed £2bn in the financial year up to April 2023.
According to the statement issued by A&O, Price has stepped down “for personal reasons”. It marks the end of a 30-year career at the firm, where he began as a trainee and became one of its youngest partners back in 2003. He was elected managing partner in 2020 and, as A&O senior partner Wim Dejonghe puts it, “steered [A&O] through the pandemic and played a pivotal role in the negotiations with Shearman & Sterling that set [the firm] up for success in the future”.
The big question now is who will replace Price at this pivotal juncture, as the legal sector waits with bated breath for the outcome of the partner vote in the coming months. Watch this space for updates.
It’s always jam tomorrow for Lady Hiroko Barclay
The long-running saga of Lady Hiroko Barclay’s divorce from her billionaire ex-husband Sir Fred – one half of the famous Barclay twins, the business tycoons who once owned the Daily Telegraph and the Ritz – still seems far from over: more than two years after being ordered to pay his former spouse £100m, it was revealed at a hearing before the Royal Courts of Justice last Friday that Sir Fred has yet to give Lady Barclay a single penny of the huge divorce settlement.
According to Sir Fred’s barrister, the money is currently being held up by lenders, but is definitely on its way. Upon hearing this, Sir Jonathan Cohen, the High Court judge who has presided over the case from the outset, described Sir Fred’s ongoing failure to pay as a “charade”, and highlighted that the repeated promises of imminent settlement have now taken on a distinct ‘jam tomorrow’ quality: “I have been told on four or five occasions that this case needs to be adjourned because there is a deal that is about to come to fruition. At the moment I don’t have any certainty that it is ever going to happen.”
Hiroko Barclay, who filed for divorce in 2019 on the grounds of unreasonable behaviour, had previously claimed that Sir Fred was in contempt of court for failing to pay her. Last July, Sir Cohen ruled that, although Lady Barclay had failed to provide sufficient evidence that Sir Fred had the means to pay the £100m owed, he was nevertheless in contempt of court after failing to pay her around £245,000 in legal expenses and maintenance.
Sir Fred is being advised by Marcus Dearle, Senior Partner at Miles Preston, the self-styled “original leading boutique divorce and family law practice in London”. The firm has instructed barristers Charles Howard KC and Max Turnell, both of One King’s Bench Walk chambers. Lady Barclay is represented by Payne Hicks Beach, which has instructed Stewart Leech KC of Queen Elizabeth Building.
Is DWF about to bid the LSE adieu?
Publicly listed law firm DWF is the biggest legal services business to be traded on the London Stock Exchange – but perhaps not for much longer, as the firm has announced that it has entered negotiations to sell itself to Inflexion Private Equity. If the sale goes ahead, DWF will once again become a private firm after four years of being listed on the LSE, and dozens of its lawyers will likely receive over £1m in payouts.
The negotiations concern a possible cash offer for the entire issued and to-be-issued share capital of DWF, whose current market capital stands at around £297.5m. In a statement sent to investors, the firm wrote that “Discussions between DWF and Inflexion are ongoing and there can be no certainty that an offer will be made, even if the pre-conditions are satisfied or waived.” There are no guarantees, of course, but the beancounters at Inflexion are likely to find DWF’s trading figures to be in rude-enough health, with the firm expecting net revenue of around £380m for the year ending in April 2023, according to DWF’s most recent trading statement.
The Telegraph has reported that, If the sale goes ahead, DWF’s chief executive Sir Nigel Knowles stands to receive £2.7m, as well as a potential £2.25m from shares, though this depends on performance conditions and would be awarded under a deferred bonus plan scheme. Also in line for handsome payouts is DWF’s operating officer Matthew Doughty, who is likely to receive £2.7m, as is former chief executive Andrew Leaitherland, who holds shares worth this same amount.
If DWF’s take-private deal with Inflexion becomes reality and the firm exits the LSE, this will serve as a further signal of the legal sector’s declining enthusiasm for taking law firms public – I refer you to Mishcon de Reya’s aborted plans to float on the LSE last year, and to the fate of the publicly listed Ince Group. Law firm managers probably feel that the conditions are tough enough at present without having to contend with the potential pitfalls of opening themselves up to public shareholders.
A safe Harbour for firms seeking private equity investment
On Wednesday, The Lawyer ran a story that caught my attention: Shoosmiths has divested itself of a 41-person private wealth protection group, which it has sold to Midlands-based Rothley Law. It’s not the first time that Shoosmiths has spun out one of its businesses, but what made me sit up and take note this time is the fact that Rothley was able to complete the purchase because it received private equity funding from litigation funder Harbour.
This is an interesting evolution in the world of private equity finance: a litigation funder broadening its core business to include a much wider range of financial services. The appeal for borrowers is obvious, as Harbour’s managing director Ellora MacPherson told The Lawyer: “Unlike many traditional lenders, our capital can be used for multiple purposes – in this case, for an acquisition. […] law firms are realising the benefits of partnering with a flexible lender who really understands legal businesses.”
I think this expansion of the types of financing available to firms will be welcome news to many in the legal sector: Harbour may not be the cheapest lender out there, but the fact that it is mainly run by lawyers who really understand the industry, and that – crucially – it can be flexible in the way it structures its loans, will have huge appeal to law firms seeking the holy grail of growth through acquisitions.
The Lankelly Chase story: a teachable moment
At this point in the newsletter, I’m going to have to ask you for your forbearance: please humour me for a minute, dear reader. For, although admittedly not strictly legal-sector news, this Guardian story about charitable foundation Lankelly Chase’s plans to abolish itself and give away its assets caught my attention for two reasons.
Firstly, it’s interesting in and of itself to hear that a charitable institution of this size and stature has independently decided that its very existence is morally incompatible with its own charitable mission, in this case to tackle racism, injustice and inequality. In the words of Lankelly Chase chief executive Julian Corner: “Philanthropy is a function of colonial capitalism, it has been shaped by it, is being driven by it, and yet philosophically it tries to position itself as somehow a cure for the ills of colonial capitalism, and that contradiction needs to stop”. In other words, Lankelly Chase’s trustee board have decided that their organisation is part of the problem it was set up to help solve.
Secondly, the article itself exemplifies a bug-bear of mine. I will expound momentarily, but first let me ask you this question: what is wrong with the following two excerpts from the Guardian piece?
“The 60-year-old institution said it would spend the next five years giving away its assets to organisations and networks which are doing ‘life-affirming social justice work’ in communities around the UK.”
“‘We know not everyone will agree with this decision, and we are not saying every endowed foundation should follow our direction. However, we believe that the case for profound change is now impossible to ignore, and each of us must find our answer. This is ours,’ Lankelly Chase said.”
So, call me a curmudgeon, a pedant, and old stick in the mud if you will, but it gets my goat when quotes are wrongly attributed in this way: no company – not even a charity – is capable of saying anything; nor can it make a statement. A spokesperson can certainly say something on behalf of a company, institution, body or what-have-you, and said company/organisation/whatever can issue a statement. But what you cannot do is attribute direct speech to an organisation in this way.
And on that note: to quote Holly Hunter in O Brother, Where Art Thou?, “I’ve spoken my piece and counted to three” (drops mike).
In other news:
The UK and Japan pool their justice expertise
Japan and the UK are deepening their diplomatic ties by entering into a formal agreement to exchange information and expertise on legal matters and justice-related issues. There is hope that this marks a further step in the full opening of Japan to foreign law firms. For more on this story, see this article in the Law Gazette.
AI’s impact overstated – at least for now…
Professor Richard Susskind, an expert on the use of AI in the legal sector, has stated that the impact of generative AI on the legal profession has been vastly overstated in the short term, and profoundly underestimated in the medium and long term. For more on this story, see here.
Innovative mentoring scheme to boost Black representation in the law
The Stephen James Partnership, a legal recruitment firm specialising in promoting diversity, has developed a digital mentoring scheme with the aim of boosting Black representation in the legal profession. This innovative tech platform will help forge connections between qualified Black lawyers and senior decision-makers in law firms and in-house legal teams. Click here to read more about the mentoring scheme.
New bill to tackle workplace bullying proposed
Labour’s Rachael Maskell, MP for York Central, has proposed a new bill before Parliament with the aim of tackling workplace bullying by creating a legal definition and putting in place robust mechanisms for tackling this issue. According to research, up to 15% of the UK workforce has been affected by workplace bullying at some point. For more on this story, see this article in the Independent.
Pinsent Masons among firms set to move into Gary Neville’s new landmark development
Both Pinsent Masons and Hill Dickinson have both signed up to be anchor tenants at former Manchester United footballer Gary Neville’s landmark St Michael’s development in Manchester. Neville’s scheme is set to transform this area of the city centre and, according to the official website, will be Manchester’s “first fully Net Zero Carbon commercial development in both operation and delivery”. For more on this, see here.
Summer reads from some friends, contacts and clients…
As the summer holidays are rapidly approaching, I thought it would be fun to include a Summer Reads section in the newsletter, where we will share book recommendations from friends, contacts and clients.
Jon Key Chief Strategy and Transformation Officer and Business Adviser, Founder and Managing Director of Key and Co Ltd. author, says
“I wrote Finding Light in the Darkness: How businesses, organisations and teams adapted to the pandemic, and the lessons for other challenges and crises. It’s a fascinating compilation of stories of businesses’ experiences of survival, and a great opportunity to learn from the pandemic.”
Joelle Byrne, Business Strategist, says:
“My go-to recommendation is always The Big Leap by Gay Hendricks. No matter where you are in business or life, it’ll give you a proper kick up the tush 🍑 so damned inspiring and gives lots of opportunity for introspection and self improvement.”
Jon Dunckley, Director, About Consulting, says the
“best business book I’ve read in a long time is Never Split the Difference by Chris Voss… FBI hostage negotiator… Full of useful tips. As a more off-the-wall one, The Happiness Advantage by Shawn Achor. Really good insight into how happiness leads to success rather than the other way round. For fiction, I love the Cormoran Strike books by Robert Galbraith (JK Rowling).”
Sarah Burgess, Career Coach /LinkedIn Coach, Koru Associates says:
“I’ve just finished Fortitude by Bruce Daisley for my business book club. I thought it was good, it talks about resilience and basically what an overused and ridiculous word that is. There’s a lot of good stuff in there about the value of community.
“As for fiction, I’ve just finished The Last Goodbye by Tim Weaver, I really enjoy this series, but that is book 12. The series is about David Raker who is a missing person investigator, UK based.”
Jo Green, Writer, and blogger says:
“Thursday Murder Club series. Brilliant characters, and equally brilliant plots and twists.”
Emma Brown, Writer & Copywriter, The Word Concierge, says:
“I seem to read bleak novels in the summer. Give me The Bell Jar on the beach any day 😂 My reasoning is that I can get into the heavy stuff when fully relaxed.”
“This book delves into transformative technologies reshaping our world and economy. It equips readers to harness Web3, the Metaverse, and AI, empowering them to create unique brands and monetise the digital revolution”
“This non-fiction follows the journey of a woman living it up in LA when suddenly her whole life gets thrown a curveball: she gets pregnant with a touring musician who turns out to be interested in someone else. She then moves to a shady part London to start a new life with her newborn. Sophie’s raw, honest and inspiring story taught me the importance of perseverance and love for something unexpected (in this case, it’s her child she’s left to raise on her own). And it’s genuinely funny.”
Megan Marshall – who is doing a placement with TBD this week – has opted to name four books:
First is cult classic 253 by Geoff Ryman:
“253 is the novel about everyone you’ve ever met and wished you hadn’t or wished you could again. 252 passengers and one driver on the London Underground. They all have their own personal histories, their own thoughts about themselves and their travelling neighbours. And they all have one page devoted to them. Well, 253 words to be even more precise.”
Then The paper palace by Miranda Cowley Heller:
“On a perfect August morning, Elle Bishop heads out for a swim in the pond below ‘The Paper Palace’ – her family’s holiday home. diving beneath the water she relives the encounter she had the night before, against the side of the house that knows all her darkest secrets, while her husband and mother chatted to their guests inside…
So begins a story that unfolds over twenty-four hours and fifty years, as Elle’s shocking betrayal leads her to a life-changing decision.”
Next, it’s Noughts and Crosses by Malorie Blackman:
“Blackman imagines a society where American history has been turned on its head. Sephy is a Cross: she lives a life of privilege and power. Callum is a nought: he’s considered to be less than nothing – a blanker, there to serve Crosses. They’ve been friends since they were children, and they both know that’s as far as it can ever go. this is love story that will lead both of them into terrible danger . . . and which will have shocking repercussions for generations to come.”
And finally, Where the crawdads sing by Delia Owens:
“For years, rumours of the ‘Marsh Girl’ have haunted Barkley Cove. So in late 1969, when handsome Chase Andrews is found dead, the locals immediately suspect Kya Clark, the so-called Marsh Girl. But Kya is not what they say. Sensitive and intelligent, she has survived for years alone in the marsh that she calls home, finding friends in the gulls and lessons in the sand.”
Chloe Christine, the queen of analytics here at TBD says:
“You’ve asked the wrong person 😂because I read 103 books in the last year so I’m having a hard time choosing one ..”
Jacob Nomafo, founder of Luicd Meme, opts for:
“Loved it. Nudges you to audit the way you see the world. Read it before the pandemic, it being a prime example of a black swan event itself.”
Then… Sapiens (obviously)
“Just has to be done (if not already). Covers a lot of important stuff, and gets you thinking.”
And finally… Yes!: 50 Scientifically Proven Ways to Be Persuasive –
“A fairly recent fun read. Useful and relevant examples, encourages counter-intuitive thinking.”
Sophie Hartley (Flint), who heads TBD’s writing and PR team says:
“I loved reading Stephen King On Writing: A Memoir of the Craft – something to help develop the creative side of writing, and understand what makes a reader love a story. This applies to blogs and content writing too.
A Matter of Death and Life: Love, Loss and What Matters in the End – Irvin Yalom and Marilyn Yalom – an emotional read that helped me to connect with what really matters in life, and motivated me to pursue the things I want to do so that I can live as fulfilling life as possible.”
Catriona Collier, founder of Flare Insight, nominates:
Rebecca by Daphne du Maurier. “It is old school gothic joy/torture that kept me gripped through the ordeal of a rainy English lockdown holiday of yesteryear.”
And, because she’s someone who reads about the law every day, she’s opted for a report by Thomson Reuters as “The best report on UK law firm trends – less waffle, more predictive than a lot of stuff out there!”
Stephanie Paterson, co-founder of Ramsay Paterson LLP says:
“I’ve just read ‘A Town Called Solace‘ by Mary Lawson, a Canadian author. It’s a very human tale about various inhabitants of a small town, told through three different voices. The characters are fascinating and feel authentic. I’d highly recommend it.”
If you want to share your book recommendations, please just drop me a line.
Microfiction writing challenge
Speaking of good writing, I have organised a microfiction writing challenge on LinkedIn, which you can read about here.
Want to take part and express yourself as a writer? You need to write a 300-word piece of fiction and then publish it on your linkedin as a post on Friday 21st July at 9am in the morning (BST). Please include the hashtag #microfiction and tag me in so that we can compile all the submissions.
It’s not a competition and I won’t be judging the results in any way – simply treat it as a challenge to exercise your grey matter and get your creative juices flowing! I think we now have 30-40 people who’ve said that they will take part.