2017 has been a good year for Eversheds, which made significant strides internationally – first through its tie-up with US firm Sutherland Asbill & Brennan in February and then in gaining Singapore Ministry of Law approval and merging with local firm Harry Elias Partnership in June.
In a year of significant international change, the firm also posted its best growth in revenue terms for some time although profit per equity partner (PEP) dipped slightly. Turnover was up 8% to £438.6m for 2016/17, just eclipsing the 7% growth achieved on the top line in 2015/16. PEP now stands at £725,000, down £17,000 or 2% from the previous financial year but is up 16% from the £642,000 posted in 2011/12. Overall, Eversheds’ top line has grown 20% in the last five years, from £366m.
Unsurprisingly, co-chief executive Lee Ranson says the long-awaited combination with Sutherland was the highlight of the past year.
‘It was something we worked towards for a long time and it was great to see that finally come to fruition. The negotiations, the announcement and the way that was received by our people, our clients and the press was very reassuring and positive. We also had a good year generally on the back of growth as well. Germany was an office that did exceptionally well in its first full year as part of the LLP. And there was general growth across our core transactional business.’
‘While we haven’t seen any slowdown in the business immediate to the referendum decision, it is starting to knock confidence in the robustness of the UK in the medium term.’
Lee Ranson, Eversheds Sutherland
However, he concedes that the low point for the firm over the last year is the result of the Brexit vote and the uncertainty that vote cast on investment plans, particularly from a UK perspective.
‘While we haven’t seen any sort of slowdown in the business immediate to the referendum decision, it is starting to drip through and knock confidence in the robustness of the UK in the medium term.’
Despite this, he says certain regions of the UK covered by the firm are outperforming others. ‘Birmingham is booming on the back of changes in the financial services sector with some of the reconstruction of the banking sector. If you did a crane count, I suspect Birmingham may well be top of that table. We are seeing Birmingham and Manchester in particular as areas that in the last couple of years have shown significant growth and opportunity.’
Ranson and his US counterpart Mark Wasserman will unveil the combined firm’s new strategy this month, which is likely to contain few surprises: ‘It is important to identify what strands of action that will involve and we are just finalising that plan at the moment with our partners. The goal for us is that by 2020 we are recognised as a leading global law firm.’
LB: Which group of firms in the LB100 are under the most pressure?
Lee Ranson: Firms that do not have a good spread of clients and locations will struggle more. We have never had the view that a client instructing us in London would only be serviced by the London office. Our model allows us to flex our offering to reflect the client’s needs and the firms that have the ability to do that will prosper more than those that cannot. In addition, those that have an international offering have another layer of potential, both in terms of new work and the ability to cover off risk in the UK market.
How do you see London evolving as a legal and financial services hub?
Ranson: London has got a great track record of innovation and the ability to adapt. It will have to continue to do that and you could argue the over-dependence on financial services will have to change. However, I am very confident the market in London will adapt over time. There are certain areas, such as technology and start-up hubs for example, in which London has shown a fantastic ability to nurture and grow. We will have to put more effort and energy into that. Over a 15-year window, you could see quite significant change in financial services both in terms of the size and dominance of it in London.
How is the UK market coping generally at the moment?
Ranson: The UK transactional market remains robust. Whether that is only in the short term, we are unsure. The real estate market took a hit to start with, but currency fluctuation has played a part in keeping demand at a certain level. I suspect we will start to see a drop off in that market over the next quarter. It is quite clear that some of the central government infrastructure initiatives and investment are continuing to help keep certain areas of the development and property market robust but how long can that continue?