The regional and smaller national firms that sit in the 51-100 bracket of the Legal Business 100 (LB100) have again proved their mettle. Twenty nine firms, with an average of 250 lawyers and 30 equity partners, have shone again.
Following last year’s 7% overall revenue growth, the group’s collective revenue was down to £1.41bn for 2020/21 – although there are two fewer firms in this category than last year. It is the average performance that tells the complete story: a striking revenue increase of 11% from £47m to £53m. This growth is also reflected in per lawyer metrics across the group. Revenue per lawyer (RPL) held steady at £192,000, but profit per lawyer (PPL) jumped 14% from £37,000 to £43,000. Average profit per equity partner (PEP), however, also moved up an impressive 8% to £352,000. And, while the performance of non-City firms in the second half of the LB100 is not nearly as strong on average metrics as their London counterparts (see part III), the gap is certainly narrowing and the firms in this group have far outperformed City and boutique firms on a year-on-year basis.
Perhaps the most noteworthy moves from regional firms in this section came in the form of mergers. Moore Barlow, the result of a tie-up between Moore Blatch and Barlow Robbins in May 2020, has cemented its position within the LB100, having filed its first full financials as a merged entity in 2021. But it is the acquisition of East Anglian firm Hewitsons by Harrison Clark Rickerbys that took effect on 1 June this year, which sees another large regional player move up the table. The merger brings the two firms together into a firm of approximately 780 people and £65m turnover (note that the revenue in the LB100 table is an estimated combined revenue of the two firms).
Harrison Clark Rickerbys (trading as HCR Hewitsons in Cambridge, Milton Keynes and Northampton) has more than 780 staff and partners based at offices in Birmingham, Cambridge, Cardiff, Cheltenham, Hereford, London, Milton Keynes, Northampton, Hereford, Thames Valley, Worcester and the Wye Valley.
But among the more established firms in the table there have been some standout performances and the message coming from an overwhelming number of managing partners is one of positivity. Richard Medd, managing partner at Browne Jacobson, which saw revenue move up 5% to £85.1m, sums up the position of many: ‘We have achieved brilliant financial results in a challenging year for many businesses. The start of the year saw Covid impact on many parts of our business, but that also brought opportunities for us and I am delighted to say all parts of the firm ended the year very strongly. Looking ahead we predict more growth for 2021/22 as the country eases itself out of lockdown with our focus firmly on helping our clients navigate through very challenging times. For me the defining memory of the past year has been the incredible resilience, creativity and flexibility shown by our people and clients in adapting to the changing environment we found ourselves in. I couldn’t be prouder.’
In Scotland, leading independent firm Brodies, which on paper produced modest results with a 1% increase in revenues and flat profits, was keen to point out the reality behind the numbers on its survey form: ‘The firm continues to have no debt. Throughout the year, we continued to trade without access to external resources, or borrowings, nor did we seek UK government assistance in response to the Covid-19 pandemic. All roles, salaries and profit shares were preserved in the year, with bonuses awarded at year end.’
‘The start of the year saw Covid impact on many parts of our business, but that also brought opportunities for us and I am delighted to say all parts of the firm ended the year very strongly.’
Richard Medd, Browne Jacobson
Managing partner, Nick Scott, says: ‘The early part of the financial year saw clients assessing what the pandemic meant for their businesses, their organisations and their lives. And while some activity paused, clients quickly got on with addressing the pandemic’s impact and, from there, to working out how they would operate and live after the pandemic. This saw them continue to trust us with their instructions.
‘As a result, we begin the new financial year confident in the judgements made about our firm’s priorities in the 2020/21 year and humbled by the contributions of our colleagues and the trust our clients placed in our firm.’
Meanwhile, Bevan Brittan’s managing partner Duncan Weir says the national law firm’s latest results, which show both revenue and profit growth, demonstrate that the business has dealt admirably with the coronavirus pandemic and reflect the strength of the firm’s ongoing strategic planning. The firm recorded a 10% increase in revenue to £56.1m – its eighth consecutive year of growth after breaking £50m in revenue for the first time in its history last year. PEP, meanwhile, was up a notable 20% to £633,000.
‘The strong partnership between our clients and colleagues over the past 12 months has been instrumental in our ability to successfully navigate a very challenging year. Against that backdrop, I am very proud of what our teams have delivered for our clients. We are a strong and growing business thanks to the breadth and diversity of our business and the way everyone has pulled together as one team during the past 12 months.’
Another South West stalwart, Clarke Willmott, turned in one of the strongest performances of this group, with revenue up 3% to £53m but profit rebounding significantly following a 14% drop in 2019/20 – almost doubling this time to £362,000. Chief executive Stephen Rosser says the uptick in profitability was due to a combination of factors: ‘Revenue increased, productivity and income per fee-earner increased, aided by flexible working arrangements that were very successfully adopted across the firm, following years of investment in our IT infrastructure. Elements of cost reduced and, while some of these are likely to increase in this financial year as the business returns to a more normal footing, there is no doubt that our ways of working have changed for good.’
One particular example of a cost reduction was in travel-related expenses and while many firms anticipate these will return to some extent, the forecast is that in future they will be at lower levels than those pre-pandemic. Another example for Clarke Willmott was a reduction in property costs, having already taken advantage of a lease event in its Birmingham office to move to a smaller location to make the flexible working model more effective cost-wise.
‘While some activity paused, clients quickly got on with addressing the pandemic’s impact and, from there, to working out how they would operate and live after the pandemic.’
Nick Scott, Brodies
Says Rosser: ‘Our financial position strengthened over the course of the last financial year. As a firm we place a very strong emphasis on our cash collection and WIP hygiene throughout the year and have continued to invest further in our financial processes and disciplines. Against the backdrop of what was a challenging economic environment for the vast majority of businesses, we are pleased with our financial position, increasing cash reserves and reducing our borrowings over the course of the financial year, whilst also investing in a new practice management system.’
Manchester-based JMW Solicitors, which like Moore Barlow was shortlisted for Regional/Offshore Firm of the Year at the recent Legal Business Awards, had another record year. Income at the firm increased from £47.6m to £53.4m, a 12% increase. Its London office, which opened in May 2019, contributed £10.5m of revenue compared to £5.1m in the previous year, a 106% increase.
The firm has also made the point that it reduced its lock-up of clients’ debt considerably to just 42 days, an impressive result compared to the average lock-up of 132 days among the LB100 firms that disclosed this data (see table, below).
Commenting on another successful year for JMW, senior partner Joy Kingsley says: ‘We are pleased to have enjoyed another good year of financial performance in the challenging year of 2020 /21. These have been testing times for all businesses so we are delighted with how the firm has continued to grow. The loyalty and commitment of all the partners and staff at JMW have enabled us to achieve this success. To reward our people for this, we were delighted to offer everyone a substantial bonus to say thank you.’
Highly commended for Regional/Offshore Firm of the Year at the LB Awards was Stevens & Bolton, which won the title in 2016. The firm unveiled solid financial results for 2020/2021, marking 11 consecutive years of revenue growth. In spite of the pandemic, the South-East heavyweight posted turnover of £29.1m, a 2% increase on last year, while PEP in its all-equity partnership increased by 9% to hit £267,000. These latest financial results show that since the firm first entered the LB100 in 2015, revenue has grown organically by 30%.
‘I am really proud of how the entire firm has pulled together and how, as a result of our collective efforts, we haven’t simply managed during a pandemic, but thrived.’
Richard King, Stevens & Bolton
In tandem with this sustained growth, the firm has announced a pay rise for all its solicitors, resulting in a median increase of 13% per lawyer, and also full reimbursement to all those who received temporary pay reductions last year as part of a package of financial measures the firm took in response to the immediate financial effect of Covid-19.
Commenting on the year’s results, managing partner Richard King says: ‘I am really proud of how the entire firm has pulled together and how, as a result of our collective efforts, we haven’t simply managed during a pandemic, but thrived. I am also delighted that our financial results have afforded us the opportunity to reward our stellar team. This builds on our move to an all-equity model in September 2019 – at the time, a regional first. We have long attracted talent from the City and we remain committed to recruiting the industry’s brightest and best minds.’
But despite the majority of firms emerging from the pandemic in arguably much stronger positions than before, cash-rich and profitable, there are inevitably those that have struggled. Blake Morgan has seen turnover drop 13% from £71.2m to £61.7m, in part due to the sale of its personal injury, clinical negligence and costs practices to Enable Law (part of the Foot Anstey group) in July 2020. There was also a corresponding dip in PEP, falling 14 % to £234,000.
Meanwhile, Michelmores is the only other firm in this group to see both turnover and PEP decline, albeit by just 5% and 1% respectively. Hill Dickinson, a firm that has also offloaded some insurance teams in recent years, has continued to keep silent about its recent financial performance, despite regularly announcing its performance to the press in August up until 2019. With no evidence to suggest any end to recent difficulties, the firm slides into the second half of the LB100 this year. LB
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Lock-up performance
Around half of LB100 firms disclosed their lock up, defined in days as the sum of unbilled work in progress and debtors not collected (excluding VAT). The average here, at 132, is very high and dozen of the participating firms have lock in excess of 150 days. Excessive lock-up can be a serious problem. If a firm has a lock-up of 150 days, it doesn’t get paid for work until five months on average after it has finished. Manchester’s JMW Solicitors is the strongest performer in this regard, keeping lock-up to just 42 days – considerably ahead of the pack. Meanwhile, CMS, Osborne Clarke and Pinsent Masons are standout performers among the top 25 firms.
| Firm | Lock up |
|---|---|
| JMW Solicitors | 42 |
| Keoghs | 57 |
| CMS | 70 |
| Stevens & Bolton | 80 |
| Osborne Clarke | 82 |
| Pinsent Masons | 84 |
| Farrer & Co | 85 |
| Ashfords | 88 |
| Keystone Law | 88 |
| Bevan Brittan | 89 |
| Wiggin | 89 |
| Harper Macleod | 90 |
| Sacker & Partners | 90 |
| Womble Bond Dickinson | 93 |
| Boodle Hatfield | 97 |
| Cripps Pemberton Greenish | 100 |
| Addleshaw Goddard | 101 |
| Lewis Silkin | 105 |
| Forsters | 106 |
| Weightmans | 110 |
| HFW | 113 |
| Ince | 118 |
| Kennedys | 118 |
| Capsticks | 120 |
| Withers | 120 |
| Clarke Willmott | 121 |
| Veale Wasbrough Vizards | 122 |
| TLT | 123 |
| BDB Pitmans | 124 |
| Kingsley Napley | 125 |
| Payne Hicks Beach | 125 |
| Brodies | 128 |
| WFW | 129 |
| Blake Morgan | 134 |
| Gateley | 134 |
| Charles Russell Speechlys | 140 |
| Fieldfisher | 140 |
| Thrings | 140 |
| Thorntons | 142 |
| Michelmores | 143 |
| Mills & Reeve | 143 |
| Shakespeare Martineau | 152 |
| Harbottle & Lewis | 153 |
| Howard Kennedy | 153 |
| Wedlake Bell | 157 |
| Trowers & Hamlins | 164 |
| Shoosmiths | 168 |
| Brabners | 177 |
| Foot Anstey | 179 |
| DWF | 186 |
| Walker Morris | 197 |
| Moore Barlow | 364 |
| Slater and Gordon | 493 |
| AVERAGE | 132 |