The 21 London-based firms that sit in the second half of the LB100, many of which are specialist, focused players, are known for packing a punch that belies their size. These firms average 179 lawyers and 29 equity partners and have a combined turnover of more than £1bn. The group contains some of the strongest private wealth and family firms in the country (Boodle Hatfield, Farrer & Co, Forsters, Harbottle & Lewis, Payne Hicks Beach); the strongest disputes and tech firms (Bristows, Kingsley Napley, Stewarts, Wiggin); and the definitive boutique, pensions specialist Sacker & Partners.
Perhaps because many of these outfits were lean going into the pandemic, and perhaps also their service lines are tighter than firms elsewhere in the table, the changes overall have been less dramatic than elsewhere in the LB100. Average revenue is broadly in line, up 3% from £47m to £48.3m, with a revenue per lawyer (RPL) of £271,000. But in profitability terms, while these firms are clearly high-performing, the gains in the last financial year have been modest. Profit per lawyer (PPL) and profit per equity partner (PEP) are both up by just 2%, to £85,000 and £469,000 respectively.
Individually, there have been some standout performances, most notably from Payne Hicks Beach, which specialises in advising wealthy private individuals on anything from divorce to reputation management and unfair dismissal – revenue was up 24% from £28.7m to £35.7m, while PEP moved up 14% to £600,000 from £525,000.
The second-strongest performer in revenue terms was Keystone Law, although it is not a City firm in the strictest sense because of its unique remote working model. Shortlisted for Law Firm of the Year at the 2021 Legal Business Awards, it posted a healthy 11% increase in turnover for the full year to 31 January 2021 – revenues were up to £55m from last year’s £49.6m. And the numbers are looking good for this year as well: in its half-year results, announced in September, it reported revenues of £33.7m, up 38% on H1 2021.
Chief executive James Knight said at the time the results were announced: ‘The nature of Keystone’s business model, whereby our 350+ lawyers were all well acquainted with remote working when lockdown began, has undoubtedly made it easier for the firm to remain 100% operationally efficient since March 2020. Nevertheless, I am extremely proud of what the firm and our people have achieved in the last year, not just for maintaining that efficiency but also for delivering solid growth.’
He also took aim at firms who would be potentially unwilling to shift attitudes towards remote working: ‘I am excited about the year ahead, not least because the vast majority of the legal profession has started to suspect something that we have known for 20 years: if the right tools and infrastructure are in place then lawyers, even when undertaking complicated, multidisciplinary transactions, can deliver a far better service if they are given flexibility and autonomy while enjoying a better work-life balance.’
‘We were never going to be super busy over the last year but we saw the opportunities in terms of recruitment so we recruited.’
Stephen Parkinson, Kingsley Napley
Underpinning the solid results was a year of concerted senior recruitment. During the last financial year, Keystone expanded its bench of principals (partner equivalents) by an impressive 58, from 328 to 369. That pace continued in the first half of this year, with 21 new lateral hires from a range of City firms growing the number of principals to 386.
Kingsley Napley’s Linda Woolley was shortlisted for Management Partner of the Year at the Legal Business Awards for having been managing partner at the firm since 2007, during which time she has overseen a 180% growth in fee income. The firm’s performance in the last financial year was muted, with turnover flat and PEP down double digits, but both Woolley and senior partner Stephen Parkinson have reasons to be cheerful. The firm’s partnership ranks in the last year have swelled from 55 to 72 – which explains why PEP may have taken a dip during a difficult period and underlines that the firm has continued to invest throughout the pandemic. As Parkinson notes: ‘One of the highlights has been the way that the firm pulled together and our culture which is incredibly important to us. It really stood the test…We’ve been through the fire as everyone has, but we’ve grown stronger.’
The firm has also invested in new premises on a 15-year lease, with a family office as landlord – which has inevitably ramped up costs. Debt at the firm stands at £6.37m, and against a net income of £6.55m, this means the debt to equity ratio is around 1. Says Woolley: ‘We have been open with how much extra it’s going to cost us but the accelerated investment in growth that we can make because we’re now in this building means we should be able to get increased turnover and profit earlier to repay our investments.’
Parkinson adds: ‘We continue to invest in this building where we’ve had a period of double rent, IT as well. We’ve seen this as an opportunity to grow the firm so we’re much bigger now than we were. We planned for a difficult year last year and we did better than expected. We were never going to be super busy but we saw the opportunities in terms of recruitment so we recruited. We are very strong and well positioned. We’ll never make mega-bucks but we’ll always do well and people want to work here. That’s very important to us.’
It is a similar story at Bristows, with the TMT-focused firm having a solid year. Turnover was up 2% from £50.9m to £51.9m, while PEP increased 6%; highlights include concluding the landmark research collaboration and licence agreement for Oxford University that granted AstraZeneca exclusive worldwide rights to its Covid-19 vaccine. For joint managing partner Liz Cohen, the toughest test has not been keeping the balance sheet in check but making sure that staff have been looked after.
‘The hardest decisions on how we run the business have been around sensitive issues, health, keeping people safe.’
Liz Cohen, Bristows
‘The hardest decisions over the last 18 months on how we run the business have been around sensitive issues, health, keeping people safe. It’s been difficult for all businesses, recognising what you can and can’t be responsible for. There is a duty of care to support people who are struggling but some things are out of your control. There is only so much you can do. Some things you can’t fix. It can be hard to assess in a remote environment.’
She also notes that a welcome change to emerge over the past year has been much greater diversity among senior law firm leadership. ‘Over time businesses have recognised that the more diverse you are the greater the ability to run a successful business. And that is all diversity, not just gender. The more senior role models there are, the more likely it is to continue. An equal impact of role models is the flexibility of working hours. We want that flexibility to be used by everyone equally and consistently, not just working mums. Business leaders will have to keep an eye on that when people start returning to offices.’
Even for some firms in this group that struggled financially in 2020/21, it is not all bad news. Fladgate, for example, experienced a 9% dip in turnover from £56m to £51.1m while PEP suffered as a result and was down 18% to £643,000. However, the firm has recently announced its half-year results for 2021/22, which are much stronger: revenues are up 32% on the same period last year, to £30.2m, and the firm has made eight lateral hires since April to bolster its ranks.
Grant Gordon, executive partner, commented on the positive half year results: ‘Despite the challenges of Covid-19, Fladgate has entered HY21/22 with a considerably larger team and on a positive growth trajectory. The continued investment that we are making in our firm, our people, and innovation delivers the growth evident in our half-year results.
‘Looking forward, we remain focused on delivering outstanding client services and accelerating our lateral hire programme across a multitude of strategically selected sectors to drive future growth, which builds upon the eight lateral hires we have made over the past six months.’
And Wedlake Bell, which posted a 2% drop in revenues from £37.6m to £36.7m, added to its top line this summer by announcing its merger with 170-year-old insolvency and private client firm Moon Beever, creating a firm with 71 partners and 217 lawyers and a revenue of around £45m.
Martin Arnold, managing partner of Wedlake Bell, said at the time of the tie-up: ‘The merged firm will enable us to enhance the offering to our clients in some of our core business areas – notably insolvency and restructuring, disputes, commercial property and private client… The growth of our contentious practice, in particular, continues to future proof against a challenging and fast-moving economic and operational environment.’ LB
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Carbon footprint: environmental impact of the LB100
Requested for the first time this year, around half of LB100 firms provided data for their carbon footprint, expressed as tonnes (t) of carbon dioxide (CO2) equivalent (e), and in most cases independently verified. Where possible, we have divided the tCO2e figure by the number of lawyers at the firm to obtain an illustrative ‘impact ratio’. The firms are sorted into bands below, with those with a larger global headcount inevitably having a higher impact ratio.
Fastest-growing LB100 firms: revenue 2016-21
| Firm | 2016 | 2021 | Change |
|---|---|---|---|
| Fieldfisher | £121.5m | £290m | 139% |
| Keoghs | £55m | £105.3m | 91% |
| DWF | £178.1m | £338m | 90% |
| Kennedys | £138.8m | £264m | 90% |
| CMS | £735.2m | £1,312.5m | 79% |
| Harbottle & Lewis | £25.2m | £45m | 79% |
| Birketts | £39.2m | £69.8m | 78% |
| Osborne Clarke | £178.6m | £305.9m | 71% |
| Payne Hicks Beach | £21m | £35.7m | 70% |
| Macfarlanes | £161m | £261m | 62% |
Slowest-growing LB100 firms: revenue 2016-21
| Firm | 2016 | 2021 | Change |
|---|---|---|---|
| Hill Dickinson | £103.1m | £82m | -20% |
| Blake Morgan | £74.9m | £61.7m | -18% |
| BLM | £107.7m | £96.3m | -11% |
| Shakespeare Martineau | £71m | £69.4m | -2% |
Fastest-growing LB100 firms: PEP 2016-21
| Firm | 2016 | 2021 | Change |
|---|---|---|---|
| Shoosmiths | £138,000 | £651,000 | 372% |
| TLT | £253,000 | £597,000 | 136% |
| Withers | £306,000 | £660,000 | 116% |
| Bevan Brittan | £306,000 | £633,000 | 107% |
| Boodle Hatfield | £309,000 | £633,000 | 105% |
| Walker Morris | £400,000 | £807,000 | 102% |
| DAC Beachcroft | £358,000 | £705,000 | 97% |
| Norton Rose Fulbright | £392,000 | £750,000 | 91% |
| Brabners | £167,000 | £314,000 | 88% |
| Hogan Lovells | £818,000 | £1,536,000 | 88% |
Slowest-growing LB100 firms: PEP 2016-21
| Firm | 2016 | 2021 | Change |
|---|---|---|---|
| Howard Kennedy | £506,000 | £349,000 | -31% |
| Winckworth Sherwood | £747,000 | £515,000 | -31% |
| Forsters | £550,000 | £429,000 | -22% |
| Harbottle & Lewis | £521,000 | £452,000 | -13% |
| Stewarts | £1,611,000 | £1,433,000 | -11% |
| Stephenson Harwood | £753,000 | £685,000 | -9% |
| Thrings | £180,000 | £167,000 | -7% |
| Sacker & Partners | £1,023,000 | £953,000 | -7% |
| Irwin Mitchell | £482,000 | £470,000 | -2% |
| Burges Salmon | £525,000 | £514,000 | -2% |