Addleshaw Goddard managing partner John Joyce ‘would never have dreamed’ the firm would grow by more than 60% since his appointment in 2014.
But despite that strong growth trajectory, as well as profit per equity partner (PEP) growth of 89% and a £90m improvement in its cash position to £59m of reserves since the 2013/14 financial year, Joyce (pictured) said the plan is simply to ‘press on’.
‘We get people asking us, “What are you going to do with all that cash?” and the answer’s “keep it”,’ he told Legal Business. ‘We’ll do nothing with it, absolutely nothing.’
Revenue at Addleshaws for the 2018/19 financial year rose 14% to £275.4m, its second consecutive year of double-digit growth and including a near-25% uplift in income from international offices. Profit at the firm exceeded £100m for the first time, a 16% increase, as PEP rose 12% to £727,000.
Chief financial officer Colin Brown said there was above-budget growth across every jurisdiction and division, with England and Scotland up 13% and the GCC and Asia between 20% and 25%. The energy, financial services, health and life sciences, retail and consumer, and transport sectors made up 60% of the firm’s turnover.
Brown pointed to investments over the last five years, which has seen the number of partners grow by 50% to more than 250 and overall headcount growth in lawyers and business services staff of 40%. ‘That is clearly driving some of that growth but a lot of it’s also catering for growth and making sure we can support our clients. We are having to invest substantially, both in our teams and our infrastructure, to drive this momentum and maintain it.’
Joyce added: ‘We’ve achieved more than we could ever have imagined possible. In a sense that gives you an appetite to go on and do more – we’re not going to sit back.’
In June, the firm opened its first continental European office in Hamburg with the hire of a five-partner team from Bryan Cave Leighton Paisner (BCLP), its sixth office outside the UK and twelfth overall. The firm expects to add another German office in the near-term.
Key mandates during the financial year included advising Volkswagen on global alliance and contracting arrangements with Ford for the supply of commercial and electric vehicles; on the £642m hostile bid by DNO for Faroe Petroleum – the largest AIM-listed company takeover in 2018; and for GSK in its long-running product liability case relating to antidepressant Seroxat.
Joyce said investment in the City was a key priority with the firm looking to raise its profile in London, as well as further growth in its other offices. Brown added that the turnaround in the cash position was to give the firm flexibility to both invest and weather potential storms.
‘We’re all aware of the challenges. We thought some were really going to impact last year – they didn’t – who knows if they might this year? Whenever it does, we know there are some firms out there with quite weak balance sheets and this does provide us with an opportunity to do things in a market where other firms might not be as strong as us.’
hamish.mcnicol@legalbusiness.co.uk