Trowers & Hamlins senior partner elect Jennie Gubbins has told LB that she is looking to raise the firm’s corporate profile in the City and repair its ailing international offering after a bruising few years.
The firm’s current senior partner, Jonathan Adlington, has announced that he will be retiring next year. Gubbins, currently head of corporate at the firm, will replace him in March 2013.
LB100 data shows that Trowers had a solid year in 2011/12, with turnover up 3% to £80.8m, while the UK practice is up 4% to £63.4m. The firm also secured a 14% rise in net income to £12.5m.
Nevertheless, the firm’s current revenues stand only 4% higher than the £77.6m it recorded in 2007/08 and its £38,000 profit per lawyer (PPL) is still half of the £75,000 average recorded by its City International peers.
The twin assaults of the Arab Spring and UK public sector cuts combined to give Trowers a poor year in 2010/11. After recording a 15% rise in revenues to £89.5m in 2008/09, growth remained completely static in 2009/10 and then dropped by 12% to £78.6m in 2010/11, while its PPL tumbled by 15.4% to £33,000. Significantly, its profit margin stood at 14% and only one other firm in the UK’s top 50 largest firms recorded a lower margin – SNR Denton with 13%.
‘As far as we’re concerned last year was a good year. The previous year we had our horrible year, we had our recession and we didn’t do as well as our peers in income or in profit terms,’ said Adlington. ‘But this year we bounced back and the firm has a huge amount of confidence now. All of our departments have had some growth, but the private side of the business picked up very well.’
The firm is looking to use Gubbins’ appointment to remind the market that it has strong expertise in practice areas that fall outside of its traditionally recognised strength in social housing work.
‘We’re looking to refresh our brand. We’re confident in who we are and what we’re about on the corporate side but our experience in that territory is something people don’t really know about,’ Gubbins said. ‘So building our profile is not about doing anything massively different in the corporate area – it’s just making sure that we tell people about it.’
In June, Gubbins led the team that advised Vossloh Kiepe Beteiligungs on its acquisition of rolling stock engineering consultancy Transys Projects – a deal that strengthened the German electrical company’s position in the British rail market.
‘This year we bounced back and the firm has a huge amount of confidence now.’
Jonathan Adlington,
Trowers & Hamlins
‘I have got a City “tag” and I think that is so important,’ Gubbins said. ‘Raising our City profile is as important as raising our corporate profile – we’re doing fantastic corporate deals and we want to highlight those.’ Despite the desire to make more of a push in corporate, Gubbins said that public sector work still remains one of the three pillars of the firm’s focus, alongside private sector and international work.
‘I do have a corporate client base but some of those clients are in the public sector or regularly deal with entities in the public sector,’ she said. ‘So there is a bit of a change of emphasis but not a complete change.’
In fact, according to information gathered for the LB100, the firm already derives the biggest percentage of its turnover from corporate work, which accounts for 38% of firm revenues. The second-biggest practice area is real estate, which accounts for 37% of turnover. Gubbins believes that the firm’s strength in real estate also needs to be reinforced going forward.
‘Our specialist experience in real estate underpins huge parts of our business,’ she said. ‘We’ve got some really great real estate partners. There’s been a lot of recent speculation about firms moving out of real estate but we’re certainly not.’ Gubbins added that the firm is absolutely not looking for a merger to bolster its market presence – either nationally or internationally.
Trowers’ international strategy has been subject to intense scrutiny over the past two years following some high-profile exits and office closures. It has been in the Middle East since launching in Oman in 1981 but it was forced to pull completely out of Saudi Arabia, the region’s biggest economy, last year. In September 2011 it suffered a blow through the departure of its last associate in Riyadh, which led to the termination of its alliance with Feras Al Shawaf Law Firm. In May 2011, the firm shut the doors to its Jeddah office less than a year after its launch.
‘Our international business historically has been in the Middle East,’ said Adlington. ‘We probably learnt a lesson in the year to March 2011 because we had all our eggs in the basket of the Middle East and we didn’t have much international business elsewhere. Then we had the Arab Spring and the madness there, so we caught a cold.’
However, the firm is looking to reverse its fortunes in the Middle East and expand its international strategy to other continents.
The firm opened a representative office in Malaysia in July 2012 to take advantage of growing links between Asia and the Middle East, while increasing ties between the Middle East and Africa also saw the firm launch an Africa desk in May. Most significantly of all, the firm relocated Bahrain-based partner Abdullah Mutawi to the United Arab Emirates in September 2011 to take up the newly created role of head of the UAE, which it hopes will create stronger unity between its Dubai and Abu Dhabi practices.
‘Things have settled down a lot from where they were a few years ago and we have restated our intentions in the Middle East because it is an essential plank in our business,’ said Gubbins. ‘The creation of the UAE head role and our new Africa desk demonstrates that we are very focused on re-emphasising and reshaping our Middle East and Africa practice.’