More with less - 2009-10 proves to be a year of ups and downs
Challenging? Interesting, perhaps? Pick your recessionary euphemism. Actually, topsy-turvy seems to more accurately reflect the year of highs, lows and contradictions that 2009-10 proved to be. The UK top 50 hit its first absolute contraction in fee income since Legal Week began tracking its results, with total fees falling 4% from £12.3bn to £11.9bn after last year's exchange rate-assisted growth. Yet the group as a whole, having cut hundreds of millions of pounds from its cost base while trimming equity partner ranks, managed a considerable rebound in partner profits.
July 14, 2010 at 05:01 AM
3 minute read
Challenging? Interesting, perhaps? Pick your recessionary euphemism. Actually, topsy-turvy seems to more accurately reflect the year of highs, lows and contradictions that 2009-10 proved to be.
The UK top 50 hit its first absolute contraction in fee income since Legal Week began tracking its results, with total fees falling 4% from £12.3bn to £11.9bn after last year's exchange rate-assisted growth. Yet the group as a whole, having cut hundreds of millions of pounds from its cost base while trimming equity partner ranks, managed a considerable rebound in partner profits.
But the overall numbers do not reflect the huge swings in fortune within the top 50, which show no respect for market position or peer group. What else to make of a year in which four firms saw rises in profits per equity partner (PEP) of more than 50% while seven practices saw PEP falls of 10% or more? In many cases the financial year stood in direct contrast to 2008-09, with many of the biggest climbers like Travers Smith and LG being the same firms whose profitability was so savaged during the previous 12 months.
Picking out performers by peer group is thankless this year. Unlike 2009, there is little pattern of performance. The winners are as disparate as Allen & Overy (A&O), Clifford Chance (in relative terms), Bird & Bird, Travers Smith, Kennedys and DWF. And don't forget Lovells, which signs off its last pre-merger financial year having put in a sparkling five-year run. How's that for overturning conventional wisdom?
Having a tougher time of it were Simmons & Simmons, CMS Cameron McKenna, Nabarro and, of course, Halliwells. Pick out a pattern in that.
In many ways you have to look at a longer timeline to work out which firms have real underlying momentum. Of the larger firms, the current stand-outs are Freshfields Bruckhaus Deringer, A&O, Linklaters, Lovells, Bird & Bird and Clyde & Co.
One interesting trend to note is that leverage is not edging down as expected. Though firms have cut back on the associate ranks, this has been largely offset by contracting partnerships, both through exits and a second year of stingy internal promotions. Old habits die hard; it is easier for firms to talk about providing a partner-led service than to actually deliver it.
Ironically at the end of this unpredictable year, major law firms face an outlook spookily similar to that which they eyed warily in the summer of 2009. While Western economies are again growing, concerns about eurozone debt and moves to slash public spending have largely offset the good mood. We'll be waiting until the third quarter to see whether we are dealing with a global growth story or a narrative of anxiety and austerity. It's just as well law firms look well-placed to cope, as the ups and downs seem far from over.
Click here for the full table of results.
For more analysis, see:
- UK law leaders see profits revival as revenues slide across the top 50
- Bird & Bird leads the pack as fastest-growing firm as revenue jumps 150% over five years
- Nationals see varied results with big five static
- Asia takes centre stage as firms boost revenue in Eastern markets
- Insurance firms outpace top 50 once more as revenues climb 8%
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllMcDermott Hits Paul Hastings In London Again As Macfarlanes Also Swoops For Talent
2 minute readRe-Examining Values: Greenberg Traurig's Executive Chairman on the Lessons of the Pandemic
4 minute readDiversity Commitments Feel Hollow When Firms Cosy Up to Oppressive Regimes
Trending Stories
- 1No Two Wildfires Alike: Lawyers Take Different Legal Strategies in California
- 2Poop-Themed Dog Toy OK as Parody, but Still Tarnished Jack Daniel’s Brand, Court Says
- 3Meet the New President of NY's Association of Trial Court Jurists
- 4Lawyers' Phones Are Ringing: What Should Employers Do If ICE Raids Their Business?
- 5Freshfields Hires Ex-SEC Corporate Finance Director in Silicon Valley
Who Got The Work
J. Brugh Lower of Gibbons has entered an appearance for industrial equipment supplier Devco Corporation in a pending trademark infringement lawsuit. The suit, accusing the defendant of selling knock-off Graco products, was filed Dec. 18 in New Jersey District Court by Rivkin Radler on behalf of Graco Inc. and Graco Minnesota. The case, assigned to U.S. District Judge Zahid N. Quraishi, is 3:24-cv-11294, Graco Inc. et al v. Devco Corporation.
Who Got The Work
Rebecca Maller-Stein and Kent A. Yalowitz of Arnold & Porter Kaye Scholer have entered their appearances for Hanaco Venture Capital and its executives, Lior Prosor and David Frankel, in a pending securities lawsuit. The action, filed on Dec. 24 in New York Southern District Court by Zell, Aron & Co. on behalf of Goldeneye Advisors, accuses the defendants of negligently and fraudulently managing the plaintiff's $1 million investment. The case, assigned to U.S. District Judge Vernon S. Broderick, is 1:24-cv-09918, Goldeneye Advisors, LLC v. Hanaco Venture Capital, Ltd. et al.
Who Got The Work
Attorneys from A&O Shearman has stepped in as defense counsel for Toronto-Dominion Bank and other defendants in a pending securities class action. The suit, filed Dec. 11 in New York Southern District Court by Bleichmar Fonti & Auld, accuses the defendants of concealing the bank's 'pervasive' deficiencies in regards to its compliance with the Bank Secrecy Act and the quality of its anti-money laundering controls. The case, assigned to U.S. District Judge Arun Subramanian, is 1:24-cv-09445, Gonzalez v. The Toronto-Dominion Bank et al.
Who Got The Work
Crown Castle International, a Pennsylvania company providing shared communications infrastructure, has turned to Luke D. Wolf of Gordon Rees Scully Mansukhani to fend off a pending breach-of-contract lawsuit. The court action, filed Nov. 25 in Michigan Eastern District Court by Hooper Hathaway PC on behalf of The Town Residences LLC, accuses Crown Castle of failing to transfer approximately $30,000 in utility payments from T-Mobile in breach of a roof-top lease and assignment agreement. The case, assigned to U.S. District Judge Susan K. Declercq, is 2:24-cv-13131, The Town Residences LLC v. T-Mobile US, Inc. et al.
Who Got The Work
Wilfred P. Coronato and Daniel M. Schwartz of McCarter & English have stepped in as defense counsel to Electrolux Home Products Inc. in a pending product liability lawsuit. The court action, filed Nov. 26 in New York Eastern District Court by Poulos Lopiccolo PC and Nagel Rice LLP on behalf of David Stern, alleges that the defendant's refrigerators’ drawers and shelving repeatedly break and fall apart within months after purchase. The case, assigned to U.S. District Judge Joan M. Azrack, is 2:24-cv-08204, Stern v. Electrolux Home Products, Inc.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250