A turbulent year of partner losses has culminated in disappointing financials for Travers Smith as revenue edged up only 1% to £197.5m from £195m in 2021/22.
Profit per equity partner (PEP) too was flat at £1.1m compared to last year’s £1.105m after a 9% drop in 2021/22 from £1.22m.
Travers has had more than its fair share of reversals in recent months, with a string of high-profile partner departures including that of its respected head of private equity, Ian Shawyer, to Cleary in January. Travers’ head of M&A tax Jessica Kemp left for White & Case the same month while February saw the loss of private equity secondaries specialists Ed Ford and Sacha Gofton-Salmond to Simpson Thacher. In March Linklaters picked up the respected private equity partner Genna Marten while Dechert hired Samuel Kay to its London financial services and investment management practice.
Travers has also been subjected to leadership changes in recent months, with Kathleen Russ taking the decision to step down as senior partner in May and Siân Keall stepping up as acting senior partner in January.
Speaking to Legal Business, Travers managing partner Edmund Reed was relatively sanguine: ‘The economic environment has been difficult with high inflation and a European war. Our strategy has been to continue to focus on what our clients need, and we have managed to pull off a reasonably good set of results given the world going on around us. Looking forward, the world will continue to be tricky and obviously we have got a way to go before we get back to a more benign economic environment. Our strategy remains unchanged, we will continue to focus on our clients and stay close to their needs.’
As well as noting the macro-economic trends, Reed also pointed to investments in the firm’s operational model as a contributing factor to its flat turnover and PEP.
‘We have continued to invest in our business and continued to hire people appropriately. There have been pay rises as the year goes through. Obviously, we are also in an inflationary environment,’ he added.
Over the last 12 months the firm has made several substantial investments, including establishing a Luxembourg desk for its financial services and markets department led by Loïc Bacquelaine. It has also launched several legal technology projects developed by its in-house technology team including YCNBot, an open sourced alternative to ChatGPT and Biblio, an online bible repository system. Additionally, five new partners have been promoted to its partnership.
The firm’s headline achievements include advising Brookfield Oaktree Wealth Solutions on the launch of the Brookfield Infrastructure Income Fund and advising Numis Corporation on its £410m recommended offer by Deutsche Bank. It also acted for Nomura regarding its appeal before the General Court of the European Commission’s infringement decision concerning European Government Bonds. Additionally, its technology practice advised Pay.UK on a new payments system.
Looking forward, Reed predicted continued growth across the regulatory and disputes practice and is cautiously optimistic about the outlook for corporate and M&A: ‘My sense is that the next 12 months will be better than the previous 12 months, but I don’t think the taps will be turned back on and everyone will be going full tilt. The environment is getting slightly better in terms of interest rates, but we have still got war in Ukraine and high inflation.’
Reed concluded on a bullish note: ‘The firm will continue to build on the headway it made in the last 12 months in terms of client strategy and driving business forward. It’s a difficult market but that sharpens the focus. At the end of the day, it has always got to be about the client. If you’re not 100% focused on your clients, you’re not doing it right.’