Sustained investment and the costs of bedding down a merger impacted on profits at Penningtons Manches, which posted a lift in revenue but a tumble in profits per equity partner (PEP) for the financial year 2015/16.
Revenue at the firm stood at £61.6m, up 7% from £57.5m. This represents a slowing pace of growth compared with 2014/15 when revenues rose by 23%.
PEP fell by 16% from £319,000 to £269,394, which chief executive David Raine attributed to costs associated with consolidating offices and implementing a new IT system.
The firm had 35 equity partners at the end of the last financial year, up 9% from 32, while net income (profit available to equity partners) dipped slightly from £10.2m to £9.42m, an 8% drop from the year before.
Raine (pictured) said: ‘We budgeted to make less profit, strangely, last year, so we knew.The partners knew it was coming. It is an investment point.’
He added: ‘We are trying to build IT which actually helps us do our work rather than getting in the way at times. This is always going to take time and resource but is something that had to be done.’
Raine said the firm’s disputes team in particular had a strong showing in 2015/16: ‘Our litigation team has had a marvellous year, not just one particular case but the whole team.’
Penningtons Manches was formed after the high-profile takeover of Manches by Penningtons back in 2013. Since then the firm has opened an international office in San Francisco to provide English law advice on corporate, IP, immigration, and employment matters for US businesses undertaking corporate activity in the UK and Europe. That office opened in 2014.
Other LB100 firms to post results this week include Charles Russell Speechlys, which posted a 4% revenue bump, while Trowers & Hamlins saw turnover improve by 8% for the 2015/16 financial year.
kathryn.mcann@legalease.co.uk