Legal Business

PEP surges at Macfarlanes with 24% rebound to record high

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Financial results Macfarlanes

Macfarlanes posts 24% increase in PEP to  £2.6m for 2023-24 as turnover climbs nearly 14%

Macfarlanes has released its latest financial results, reporting revenue of £309.1m and operating profit of £174m for an 11-month period ending 31 March 2024.

Annualised results show turnover increased 13.7%, while operating profit climbed 23% on the previous financial year.

Profit per equity partner, which was worked out for a comparative 11-month period, soared 23.8% to £2.6 million –  a new high for Macfarlanes and a result that comes after the firm last year reported a 16% decline in PEP against a 6% dip in profit.

Macfarlanes confirmed that it has brought its financial year-end forward to bring it in line with the UK tax year after HMRC changed its basis period rules to tax all self-employed individuals and partnerships on the basis of the tax year rather than their individual financial year-end – a change that has complicated financial reporting this year for a number of UK firms including Fieldfisher.

‘We were fortunate that our mix of practices saw high demand in 2023-24 in a challenging environment’, said senior partner Sebastian Prichard Jones in a statement. ‘We saw particularly strong performances from our transactional practices, especially with clients operating in the financial services space. Our ability to operate in the overlap between entrepeneurs and their businesses stood us in good stead.’

He continued: ‘Our litigation and investigations practice, which has doubled in size over the last ten years, enjoyed a record year. Our market leading private client and tax practices saw extraordinary demand and we expect this to continue.

‘Our thanks go to our clients for continuing to trust us with their mandates and to our people for their contribution to the continued success of the firm.’

Looking ahead, Macfarlanes will return to a 12 -month financial year end running 1 April-31 March, with new partners to be made up each year on 1 April.

alexander.ryan@legalbusiness.co.uk

Legal Business

‘Outcome still satisfactory’: revenue, profit and PEP drop at Macfarlanes as Mishcon continues growth

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Financial Results 2021/22 MacfarlanesMishcon de Reya

Macfarlanes has today (24 July) posted results that show declines in turnover, profit, and PEP for the past financial year. Turnover dropped 2% to £296.6m, while operating profit fell 6% to £151.4m. The decline in PEP was steepest: a fall of 16% took it to £2.1m.

The results mean an end to a  12-year streak of growth that saw its PEP surge past its rivals, with last year’s £2.49m placing it behind just Slaughter and May and Stewarts in the list of firms with the fastest-growing PEP in our 2022 LB100.

‘The 2022/23 financial year proved a more challenging year for our firm due to difficult market conditions although the outcome was still satisfactory,’ said senior partner Sebastian Prichard Jones in a statement.

‘After the exceptional impact of the pandemic, which had a positive effect on our financial performance, in a number of respects this was a year of consolidation. This included an increase in our equity partnership by 10%, which had what we anticipate to be a short-term impact on our PEP figure. This is an investment we were pleased to make. After taking a pause for breath in 2022/23, we remain in a strong position and are confident we will move forward again this year.’

The increase in equity partner numbers offsets the drop in PEP somewhat. And the reference to a difficult 2022 after an exceptional 2021 is well taken: there are few firms who have made similar claims as they announce their latest sets of financial results, with Allen & Overy, Clifford Chance, and Ashurst all recording dips in PEP. Macfarlanes is not the only firm to record a dip in turnover over the past financial year, with Hogan Lovells posting a 7% decline in February.

The picture painted by Mishcon de Reya was more positive. The firm posted financial results that saw total revenue increase by 10% to £255m. While slower than last year’s 23% increase, this continues a positive trend that has seen the firm continue to grow despite setbacks including a Solicitors Regulation Authority (SRA) fine and a failed IPO.

Overall profit has increased  22% to £93m, though the firm notes that the increase in profit was a much more modest 6% if IPO costs were excluded from the previous year’s figures.

Mishcon reported overall profit as a lone metric for the first time this year, describing profit per equity partner (PEP) as ‘too narrow, short term and misleading as a metric for a business as diverse as the MDR Group, which now accommodates both a traditional law firm and many start-ups.’

Group chief financial officer Matt Hotson explained further: ‘Our goal is create long term value – for our clients, our people and the society in which we operate. PEP is not a metric which is helpful in this context nor is it useful for a business like ours with a diversified offering of legal and non-legal services.’

The completion of Mishcon’s merger with Taylor Vinters in January 2023 brought it to a total of more than 220 partners. The firm reported around 80 equity partners, which would place  PEP at £1.16m – up almost 11% on last year’s £1.05m, and above its previous high-water mark of £1.1m, set in 2017.

Mishcon showed another year of impressive growth in its consultancy and advisory work, reporting an 81% growth in non-legal revenue. The firm was keen to stress, though, that the overwhelming majority of its revenue still came from its core legal services. Performance across practice areas was ‘pretty even across the firm’, said managing partner James Libson. ‘Even though one may have expected real estate to slow down, it kept its momentum all the way through to year-end. Corporate suffered a little in Q4, but the rest were solid.

‘One sees dispute resolution do better, or at least act as a hedge, in recessionary times. But there’s been a real lag in that this time around, as so much protection has been put into the system. Still, we’re seeing an increase coming through, and we expect that to accelerate over the next year.’

The firm’s strategic focus will be on bedding in its merger. ‘The innovation and early-stage market in Oxford and Cambridge is very important to us’, said Libson. The firm will also continue to extend its Asian offering, including building out its Singapore office and continuing its association with Karas So  in Hong Kong. ‘At the moment it’s a litigation offering,’ said Libson. We’ve brought in three private client partners, one in family and two in tax. Our aim is for that office to reflect the balance of our overall Asia offering, which will focus on litigation, private client, and corporate restructuring for family-owned businesses.’

More broadly, Mishcon also intends to explore options to raise capital. ‘The IPO market remains pretty closed’, explained Hotson. ‘It’s not something we’re actively looking at right now. But we have a strategic view to increasing our access to capital. We would potentially do more deals like we did with Taylor Vinters, which sometimes need more capital to make work. And we need to invest in other things like tech as well.’

Hotson also pointed to the increased availability of litigation funding as an area of opportunity for the firm: ‘We have a medium-term need for increased capital. How we resolve that need is something we debate from time to time, though there’s not  a huge amount of urgency. It’s not constraining our ability to grow now.

‘We explored the IPO as an enabling strategy to allow us to deliver growth. The listed law firm market is a very limited market. Even the private equity law firm market is not very mature. But we think we’ll see more firms take capital in, because there are things they can do with that capital. We may well be one of those.’

alexander.ryan@legalbusiness.co.uk

Legal Business

Macfarlanes credits ‘active approach’ by clients as PEP nears £2.5m

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Financial Results 2021/22 Macfarlanes

Marking its twelfth consecutive year of revenue growth, Macfarlanes today (26 July) unveiled bullish double-digit gains across the board, with turnover increasing 16% to £303.7m.

Profit per equity partner (PEP) rose 19% to £2.484m to exceed that of both Clifford Chance and Allen & Overy, which have recorded PEP of £2.04m and £1.95m respectively.

While the remaining Magic Circle firms are yet to report, Macfarlanes was second only to Slaughter and May in terms of PEP in last year’s LB100 report, with the elite firm reporting a figure of £3.2m for 2020/21. Operating profit also saw a comparable increase by 15% to £164.2m.

The results even outpaced last year’s showing, which saw turnover increase 10% to £260.96m, a 9% PEP increase to £2.09m and a 12% uptick in operating profit. The firm credited a boost in client activity post-pandemic for its enhanced performance.

Senior partner Sebastian Prichard Jones (pictured) told Legal Business: ‘Our results in 2021/22 reflect an active approach by our clients as the world emerged from the pandemic. We were fortunate to operate in areas which saw sustained high levels of client demand across the market, in both our transactional and non-transactional practices. Our alternative asset manager clients in particular were very active. Our thanks go to our clients for continuing to entrust us with their mandates and our people who rose to the challenge of increasing levels of demand.’

The firm also announced a 92% retention rate among its trainees qualifying this September with 23 out of 25 staying. Newly qualified lawyers will receive a base salary of £107,500 plus individual and firmwide bonuses. This year its firmwide bonus, which is uncapped and awarded to all staff, will be paid at 11.23%.

Despite starting this financial year on a high with the addition of corporate tax partner Sophie Donnithorne-Tait, who is due to join this summer from Akin Gump, Prichard Jones matched the market’s wary forecast for the year ahead. He concluded: ‘The outlook for this year is much more uncertain and it is clear that since the start of the war in Ukraine many clients are adopting a cautious approach.’

megan.mayers@legalease.co.uk

Legal Business

Financials 2020/21: ‘Fortunate’ Macfarlanes adds 10% to top line as 26-50 LB100 firms post mixed results

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Financial results 2020/21 MacfarlanesTLTWatson Farley and Williams

Firms ranked 26-50 in the Legal Business 100 – Macfarlanes, TLT and Watson Farley & Williams – have posted a mixed bag of financials for 2020/21.

Macfarlanes has enjoyed its eleventh consecutive year of revenue growth amid a double-digit profit uptick and profit per equity partner figures that again bely fears of pandemic reversals. The robust 10% turnover increase to £260.96m builds on last year’s 9.5% rise to £237.65m, while PEP increased 9% to £2.09m, continuing last year’s solid 10% boost to £1.91m.

The results announced today (27 July) also point to a 12% increase in operating profit for the 2020/21 financial year, only a slight dip on the increase of 14% to £126m last year. The firm said it did not reduce costs over the course of the year, in fact overall costs increased, so the results reflected growth in the practice.

Senior partner Sebastian Prichard Jones (pictured) told Legal Business: ‘The last financial year was a good year for the firm despite the challenges that were clearly evident. We were fortunate that activity levels remained strong across our three areas of business – transactional, disputes and advisory work. Thank you as always to the firm’s clients and to our dedicated people for achieving what turned out to be a good result.’

Earlier in July, Macfarlanes announced it would be retaining 22 of the 25 trainees qualifying in September, giving the firm an 88% autumn retention rate.

Jat Bains, graduate recruitment partner said at the time: ‘This has been an uncertain period for many but we have continued to invest in our trainees, knowing that an investment in our trainees is an investment in the firm’s future.’

The firm also said it was increasing base salaries for both newly qualified solicitors and trainees. First year trainees will take home £48,000, rising to £52,500 for second year trainees, while newly qualified lawyers will earn £90,000.

Fee-earners will also share in an uncapped firmwide bonus – this year paid at a level of 9.78% ignoring special Covid bonus payments – and are eligible for individual bonuses, which are not geared to hours worked. The firm said it expected newly qualified solicitors to earn in excess of £100,000 this financial year, taking into account all elements of their package.

In a similarly bullish vein, TLT has smashed through the £100m revenue barrier, posting  an 11% increase in turnover to hit £110m to coincide with the launch of a new strategy that targets revenues in excess of £140m by 2025.

The 2025 strategy will focus on anticipating and delivering against future client needs, through initiatives such as its FutureLaw programme and the further development of legal and near law capabilities. Investment will continue across its seven sectors, which include clean energy; digital; financial services; leisure, food & drink; public sector; real estate and retail & consumer goods.

It will also aim to keep equality, diversity, inclusion and wellness at the centre of TLT’s plans as the core pillar of the strategy. As part of that, the firm points to a recent multimillion pound investment in its tech platform and offices to support a shift to fully flexible working.

John Wood, managing partner at TLT, reflected on a strong position in his first year in the role: ‘We’ve worked hard to help clients manage the uncertainty and continuous change, as well as constantly looking forward to the challenges and opportunities that may lie ahead for their organisations. Growth has been consistent across all our services, sectors and locations – although each of our sectors have faced very different challenges triggered by the pandemic and the ongoing disruption that it has accelerated.

‘Clients rightly continue to expect more from their lawyers and our new strategy is about meeting that need – whether through our legal advice, transforming how we deliver services or supporting clients with the wider macro issues they face as true business advisers. That includes providing non-legal support on both the sustainability agenda and how best to rise to the challenges all businesses face around EDI and wellness.

‘Pandemic aside, breaking the £100m revenue mark is another significant step forward in our journey of continued and sustainable growth. But, we aren’t even close to done yet and, with our new strategy, will focus on looking ahead and delivering an outstanding service for our clients.’

Highlights for TLT over the last year include being re-appointed to the Sainsbury’s legal panel and securing roles on the Vodafone legal panel and UK government’s newly established trade law panel.

Watson Farley & Williams also reported its financials today, with slightly less dynamic performance over 2020/21, with income declining by 1% to £177m and a 4% dip in PEP to £553,000.

In a joint statement, managing partners Chris Lowe and Lothar Wegener said: ‘We are satisfied with the result as we entered the last financial year during a strategic review of our core business aimed at consolidating and investing in our strategy of sector focus. As part of that, we have opened two new offices in Düsseldorf and Sydney, welcomed ten lateral partners and made significant investments in our workplaces and business functions across the firm.

We are already seeing the benefit of our strategic focus with a strong first quarter to the current financial year, building on the 5% growth we saw in the second half of the last year.’

nathalie.tidman@legalease.co.uk

Legal Business

New management roles unveiled at Macfarlanes as former leader Martin retires from partnership

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Leadership Macfarlanes

Change is afoot at City leader Macfarlanes as Luke Powell has been lined up to succeed Julian Howard as managing partner, while the firm has appointed its first chief operating officer. At the same time, it was announced the much-admired former senior partner Charles Martin will retire from the partnership in April.

Sebastian Prichard Jones, Macfarlanes’ senior partner, announced the moves this morning (12 January).

With customary forward planning Powell, who was highlighted as an influential partner in Legal Business’ 2019 feature will succeed Howard when he retires from the managing partner role on 30 April 2022.

Howard has been in the role since 2010 and ‘has been instrumental in steering the firm through some of the most successful years in its recent history,’ said Prichard Jones. Meanwhile, one former Macfarlanes partner said of Howard: ‘Julian is a very honourable man and that alone gives him the power to do what he does.’ He will remain as a consultant but will retire from the partnership.

Powell joined the firm in 2004, became a partner in 2007 and became co-head of Macfarlanes’ M&A group in 2018. His regular client roster includes Chrysalis Investments, Federated Hermes, Glendower Capital, Goldman Sachs, Keyhaven Capital, Legal & General and Permira. He will continue to be a fee-earner and lead client relationships after his appointment. Howard Corney will become the sole head of M&A from 1 May 2022.

The firm’s first COO has also been appointed in the form of Katherine Milliken, who will assume the role from 1 May 2022. Milliken joined the firm in 2013 having previously spent almost a decade at Inchcape, most recently as general counsel. She has spent most of her time at the firm working on special projects including playing a leading role in shaping the firm’s response to the Covid-19 pandemic.

Finally, the departure from the partnership of Charles Martin on 31 April 2021 marks the end of an era for Macfarlanes. During an outstanding 12-year run as senior partner he helped steer the partnership through many challenges but also its most successful period of growth, particularly in the post-Lehman years and was named Management Partner of the Year at the Legal Business Awards in 2017. He will remain a senior adviser to the firm but will take up a senior adviser role with Rothschild & Co. ‘We anticipate that the majority of Charles’s working time will be spent with us, said Prichard Jones. ‘He will remain fully committed and available to our clients.’

nathalie.tidman@legalease.co.uk

Legal Business

Defying gravity – double-digit boost marks a decade of revenue growth for Macfarlanes

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Financial results 2019/20 Macfarlanes

Macfarlanes has reported robust financial results for 2019/20 – its tenth consecutive year of revenue growth – with virtually double-digit increases in turnover and profit per equity partner (PEP).

Added to this, the firm has also announced an 88% retention rate of trainees qualifying next month, as well as the lateral hire of well-regarded finance partner Malcolm Hitching.

The results announced today (3 August) show turnover grew 9.5% to £237.65m and PEP 10% to £1.91m, a notable year-on-year improvement on 2018/19, where revenues increased 8% while PEP fell marginally. Meanwhile, operating profit increased 14% to £126m, giving the firm a margin of 53%.

‘At the start of the year we would not have predicted the outcome that was achieved,’ new senior partner Sebastian Prichard Jones (pictured) told Legal Business. ‘There were many reasons for caution, including the governmental situation, Brexit, the General Election and then Covid/lockdown. Throughout the year, however, our clients remained active right across our three main practice areas (transactions, disputes and advisory). The strong activity levels right across the firm produced a decent outcome.’

He added that notwithstanding the current uncertainty, the firm was still investing in the business, with 22 of 25 trainees qualifying this September accepting places as qualified lawyers, representing an 88% retention rate.

Pending a salary review to be conducted in the autumn, the newly qualifying trainees will be paid a provisional base salary of £80,000. Individual and firmwide bonuses will be paid in addition to this as usual.

Head of graduate recruitment Seán Lavin commented: ‘We have not changed our policy due to the coronavirus situation and we are pleased to have been able to maintain our consistently high retention rates for our trainees…We recruit, train and retain them with an eye to the firm’s long-term future.’

The firm has also announced today the lateral hire of finance stalwart Malcolm Hitching, who will be joining Macfarlanes a week today (10 August). A debt finance expert with over 20 years’ experience specialising in alternative credit, leveraged finance, speciality finance and private equity, Hitching joins from the London office of Ropes & Gray, where he has been a partner since 2017. Prior to this, he had spent 13 years at Herbert Smith Freehills.

Commented Prichard Jones: ‘Through periods of market turbulence we feel that it is important to position our practice for the opportunities that more challenging times may present. Malcolm’s hire is a reflection of this thought process.’

Private client specialist Prichard Jones officially took over the senior partner role from Charles Martin in April, following a carefully managed transition period. The latest financial results mark the end of a highly successful 12-year run for Martin, during which time he led Macfarlanes to become one of the most successful and profitable operators in the City.

mark.mcateer@legalbusiness.co.uk

For more on Macfarlanes’ lengthy run as a City powerhouse, see our 2019 feature ‘Defying gravity – Inside the improbable rise of Travers and Macfarlanes’ (£)

Legal Business

Revolving doors: DLA wins back Proskauer real estate partner as Macfarlanes and Dentons make City hires

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Strategic recruitment DentonsDLA PiperMacfarlanesNorton Rose FulbrightTaylor Wessing

City lateral recruitment picked up pace again last week as DLA Piper won back a real estate partner from Proskauer Rose, Macfarlanes hired for its financial services team and Dentons strengthened its employment bench.

Joanne Owen rejoined her old firm DLA after a three and a half-year stint in Proskauer’s City corporate team, having previously worked at DLA for nearly 20 years. She advises on institutional and corporate property matters and cross-border corporate real estate transactions. She has acted for leading private equity houses, sovereign wealth funds and private high net worth investors.

The firm has also added partner Katie Jacobson to its real estate practice in Birmingham from Hogan Lovells. Jacobson, who advises institutional investors across the retail, office and industrial sectors, will join DLA at the end of this month.

Elsewhere, Macfarlanes has hired Eversheds Sutherland financial services partner Andrew Henderson, who is set to join his new firm in early 2020.

Senior partner Charles Martin told Legal Business: ‘Andrew is an outstanding fit for us given his focus on investment management clients. He offers particular expertise in retail funds, AIFMD (alternative investment regulation) and international issues, all of which are important to many of our clients.

‘All regulated financial services businesses are dealing with a huge amount of regulatory change and active intervention from regulators. This impacts our clients in the financial services industry. They look to us for joined up advice spanning all the legal aspects of the sector that matter most to them. This almost always includes regulation and quite often means that they look to us to support them when they make important judgement calls in the regulatory field,’ added Martin.

Dentons has added to its UK people, reward and mobility team in London with the hire of employment partner Purvis Ghani from Stephenson Harwood.

Dentons’ head of UK people, reward and mobility practice, Virginia Allen, commented: ‘With [Purvis’] broad range of experience across multiple areas of employment and discrimination law, his expertise will enhance our offering which handles a full suite of UK employment, pensions, employee benefits and immigration matters for our clients worldwide.’

Meanwhile, Norton Rose Fulbright has hired tax partner Florent Trouiller for its Luxembourg office from Dechert. Trouiller has experience in cross boarder private equity and real estate investment and has advised clients on all tax aspects of capital markets and securitisation transactions.

EMEA head of tax at Norton Rose Fulbright, Dominic Stuttaford, commented: ‘In the last few years, Luxembourg’s significance as a jurisdiction for financial institutions has grown, and its tax regime has become more complex. Therefore, a strong tax capability in Luxembourg underpins our pan-European and international tax offering.’

The Luxembourg office opened in June 2017 with three partners and is now operating with more than 18 fee earners across various practice areas.

Finally, Taylor Wessing has hired back its former Dubai head of corporate and co-managing partner Osama Hassan after an eight-year stint at Pinsent Masons. He joins as the firm’s Dubai managing partner and was previously head of the Middle East group and the corporate practice at Pinsent Masons.

Managing partner Shane Gleghorn commented: ‘Osama is widely recognised in the UAE market. We have a long-established platform in Dubai and our international client base has evolved significantly in TMC and private wealth. These are areas that we are known for being strong in and Osama’s experience across family owned businesses and technology in the region are hard to compete with.’

muna.abdi@legalease.co.uk

Legal Business

Revolving doors: KPMG and Orrick hire City partners as Ashurst and A&O focus on Germany

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Strategic recruitment Allen & OveryAshurstKPMGMacfarlanesOrrick, Herrington & Sutcliffe

Lateral hires in London and Germany were the order of last week, with KPMG  bolstering its City legal services bench, Orrick, Herrington & Sutcliffe hiring a London-based energy and infrastructure partner, while Ashurst and Allen & Overy recruited practice heads in Germany.

Big Four accountancy firm KPMG has hired partners Kate Eades from Greenberg Traurig and Usman Wahid from Bryan Cave Leighton Paisner in a further boon to its legal services capabilities.

Corporate partner Eades’ experience includes advising on mergers and acquisitions, restructurings and joint ventures while Wahid is a commercial and technology partner focusing on IT/technology and outsourcing transactions. He has acted for clients on business critical software, new and disruptive technology as well as infrastructure deals.

UK head of Legal Services at KPMG Nick Roome (pictured) commented: ‘Our clients need the best expertise when they look to KPMG for support with business reorganisations, deals and other complex transactions, which is why we’ve brought in Kate and Usman. Their knowledge and skills will considerably strengthen the depth of our capabilities in this area and further enhance our ability to support KPMG clients with the challenges they face.’

The appointments follow that of Peter Workman in March who joined from PwC and leads the Midlands legal services hub and Angela Savin, who joined the legal service’s tax litigation team as partner from Norton Rose Fulbright in January.

Elsewhere in London, US firm Orrick has hired as a partner former Herbert Smith Freehills energy and infrastructure senior associate Hannah Roscoe.

Roscoe is experienced in global transactional and regulatory matters including project developments, financings and mergers and acquisitions.

Global head of Orrick’s energy and infrastructure group Blake Winburne told Legal Business: ‘Our strategy is to look at the opportunities that present themselves to us in Europe for transactions as well as opportunities that are available from that platform into developing markets around the world. Hannah is going to be an important member for us, particularly on the power regulatory side but also more broadly in the power sector as well as the infrastructure side.’

Macfarlanes is set to lose senior adviser and head of digital and innovation Mike Rebeiro after 18 months. He led an initiative introduced last year to develop the firm’s digital and innovation capability. The firm said Rebeiro will not be replaced, instead a number of partners from across the firm will be moving the initiative forward.

A spokesperson for Macfarlanes said: ‘Mike has led our team to a successful conclusion of our project and we believe we are now uniquely placed to advise our clients in all sectors on the disruptive effects of new technologies. We wish Mike every success in his future endeavours and thank him for the contribution he has made to Macfarlanes.’

Meanwhile in Germany, Ashurst has hired former Shearman & Sterling tax lawyer Anders Kraft to its Frankfurt office as head of tax.

Kraft has experience in national and international tax advice, capital markets transactions, internal corporate restructurings as well as general tax planning and tax disputes. He acts for domestic and international corporate clients, private equity firms, banks and financial services providers.

Managing partner of Ashurst in Germany Tobias Krug commented: ‘Anders is highly experienced in advising on the tax aspects of domestic and international real estate, private equity and corporate transactions and he is a perfectly complement to the European and German tax team.

He added: ‘Ashurst is already ideally positioned in these areas and Anders will make a significant contribution and help us deliver even more for our clients.’

Also in Germany A&O has hired Osborne Clarke data protection expert Ulrich Baumgartner to its Munich office as head of the data protection team in Germany.

Baumgartner focuses on German and European data protection law as well as cloud and IT law. He will work closely with the firm’s IP/tech team.

Senior partner of Allen & Overy in Germany Thomas Ubber commented: ‘Client demand for advice in the field of data and data protection has grown strongly in the wake of various new laws and increased digitalisation and use of technology.

‘With Ulrich, we now have the necessary enhancement at partner level and at the same time further develop our global consulting practice on cloud-based business models.’ Ubber added.

Finally, in Singapore, HFW has added dry shipping expert Christopher Metcalf to its growing shipping practice. Metcalf, who joins from Clyde & Co, has acted for vessel owners, charterers, offshore service contractors, oil majors, mining companies and traders in contentious and non-contentious matters in the shipping, offshore and oil and gas sectors.

In the last five months, HFW has added eight shipping experts globally including shipbroker Chris Jones and an Ince shipping team, which launched the firm’s Monaco office earlier this month.

muna.abdi@legalease.co.uk

Legal Business

Macfarlanes’ revenue continues to defy gravity but PEP holds steady

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Financial results 2018/19 Macfarlanes

City stalwart Macfarlanes has posted a mixed bag of financial results as the ninth consecutive year of revenue growth failed to translate into a rise in profit per equity partner (PEP) following last year’s 26% surge to £1.74m.

The results announced today (10 July) show turnover grew 8% to £216.98m in 2018/19, a significantly slower pace than last year’s exceptional 20% rise to £201.5m.

Operating profit rose 4% to £110.74m but PEP was marginally down to £1.734m as the firm grew its tight equity partner ranks by three to 56. The total number of partners at the firm was down by three to 84.

‘In a tricky environment to see this increase in revenue is pretty gratifying,’ senior partner Charles Martin told Legal Business. ‘Our model of having a balanced practice between transactional, advisory and contentious/investigation is delivering greater resilience and that accounts in substantial measure for the positive revenue growth.’

On the comparatively slower profit growth he said: ‘We have a cost base that we are obviously working hard to contain but we have to be realistic. We pay our people properly in line with what the market demands.’

Mandates keeping the firm busy included advising Searchlight Capital Partners on the English law elements of its $2bn acquisition of Mitel Networks Corporation; Foncière des Murs on the purchase of 14 hotels for £858m; and a consortium of Stanhope, Mitsui and AIMCo on the letting of White City Place to Novartis.

The year saw some unusual lateral activity for the mid-tier thoroughbred. Of the only 14 partners the firm has hired in the last decade, three joined since the beginning of 2019. Following the early retirement of one of its highest billers, Graham Gibb, in February the firm brought in Ashurst’s former corporate head Robert Ogilvy Watson. The same month it hired Charles Russell Speechlys private client property partner Ian Cooke, and in the spring it recruited corporate partner Peter Baldwin from Ropes & Gray.

Martin added: ‘Going into the summer we are busy. It’s very important to have a busy July, August and September because if you are not you will suffer. So far the signs of activity are good.’

Macfarlanes, which remains one of the most successful and profitable operators in the City, is due for one of the most significant moments in its recent history next year, as Martin hands over to private client partner Sebastian Prichard Jones in April 2020 after 12 years at the helm.

marco.cillario@legalease.co.uk

For more on Macfarlanes’ improbable rise under Martin’s watch, see ‘Defying gravity’ (£)

Legal Business

A special situation – Macfarlanes overcomes lateral reluctance with rare spate of hires

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Strategic recruitment Macfarlanes

Corporate partner Peter Baldwin joins the City outfit from Ropes & Gray

Traditionally reticent to engage in the lateral recruitment market, Macfarlanes has continued its recent flurry of hires, this time recruiting special situations and corporate partner Peter Baldwin from Ropes & Gray.