Travers Smith has today (26 August) reported a modest 5% rise in revenue to £195m from £185.7m. This represents a slowdown from the firm’s 15% hike last year as it is impacted by the war in Ukraine and resulting macroeconomic challenges.
Profit per equity partner (PEP) fell 9% to £1.105m from £1.22m in 2021. Meanwhile, equity partner numbers stayed broadly flat with 58, one more than last year.
The firm’s later year end of June 30 meant that it was hit heavier in its final third than other firms by the economic disruption caused by the outbreak of the war and the subsequent rising costs globally.
This is not the first time the firm’s growth has been thwarted by economic volatility. Its 2020 setback of a 1% revenue drop, a 11% slump in net profit and a 20% fall in PEP was attributed to the coronavirus pandemic and exacerbated by its later financial year end.
Edmund Reed (pictured), who assumed the role of managing partner in 2021, is optimistic despite the challenging backdrop. He said of his first year at the helm: ‘It has been an extraordinary year. Who would have thought we would have ended up here, with all the things happening at the moment and what we read in the news? Against that we have had a pretty resilient set of results. We continue to be confident in our model and have continued to invest appropriately in the things we think we will drive profitability over the coming years.’
In the past year, the firm promoted 11 to the partnership and in August 2021 announced the relocation of its City HQ to Stonecutter Court planned for 2025. It also launched several legal technology projects, developed by the firm’s in-house team, including automated eSigning service TSSign.
Among the firm’s headline achievements, it won a protracted $5bn civil fraud claim brought by Hewlett Packard Enterprise relating to the $11bn acquisition of Autonomy. Other contentious highlights included defending a European truck manufacturer in damages claims arising from the European Commission’s Trucks cartel decision and conducted an investigation and cultural review following allegations of sexual misconduct against senior executives at a FTSE 250 company.
Elsewhere, its asset management team advised Nest on its £600m move into private equity with its partnership with Schroders Capital. M&A transactions to note included advising Brewin Dolphin on its recommended £1.6bn takeover by RCB Wealth Management, and assisting Ancala Partners with its acquisition of aerial emergency services businesses from Babcock International in Italy, Spain, Portugal, Norway, Sweden, Finland and Mozambique.
Looking forward, Reed predicts continued growth across the corporate and M&A, asset management and disputes and investigations practices, but remains alive to the challenging realties of the coming year:
‘It is incumbent on all businesses to be as agile and nimble as possible. We’re a world away from where we were two months ago, let alone the two months before that, so it makes it a very difficult environment in which to make very confident predictions. Having said that, the strategy remains to focus on and to drive heavily towards those three areas. We will continue to invest appropriately and develop our business to be well placed in the short, medium and long-term.’