Revenue growth at Herbert Smith Freehills (HSF) remains sluggish after a strong year for the corporate practice was offset by a relative slowdown in disputes.
Revenue grew a steady 4% to £966m, whereas profits grew 11% to £307m. Profit per equity partner (PEP) matched overall profit growth, rising 11% to £949,000.
Last year the firm posted flat revenue growth, up less than 1% to £927m as profit grew 8%. Last year’s PEP growth at 12% outpaced this year slightly, however. Over the last two years, the disparity between revenue and profit growth has been stark, with revenue up 5% as PEP and overall profit grew 25% and 20% respectively.
‘The two engines of the firm – our people and our clients – are firing at the moment,’ HSF chief executive officer Mark Rigotti (pictured) told Legal Business. ‘Corporate is up 16% globally, it’s been a really good contributor.’
He added that while none of the firm’s practice areas had a bad year, its traditional breadwinner – disputes – saw slower than normal growth: ‘Disputes continued to do well, but not as much an increase as other years.’
Employment grew 11%, while Europe was one of the firm’s stronger regions. Meanwhile, mood among partners at the firm is said to be high due to an increase in remuneration: ‘What we pay partners is by point value and that’s gone up 15%,’ Rigotti said. ‘It makes people feel good and confident.’
The firm announced a 13% increase to its associate pay package last week to £105,000 including salary and bonuses, in a hope to place greater emphasis on performance rather than post-qualified experience.
