Five-year figures show PEP falling by more than 10% at over 20 firms

Two thirds of firms in the UK top 50 have seen profits per equity partner (PEP) fall over the past five years, according to research compiled by Legal Week.

The figures show that only 16 firms in the top 50 have increased PEP since the 2007-08 financial year, compared with more than 30 that have seen profits slide. 

More than 20 firms have seen PEP fall by over 10% in the five-year period since the height of the credit crunch, with Field Fisher Waterhouse, Speechly Bircham and Trowers & Hamlins all seeing partner profits tumble by more than 40%. 

In contrast, Kennedys, DWF and RPC lead the select band of firms to have grown PEP over the period, with all three seeing rises of more than 20%.

RPC managing partner Jonathan Watmough (pictured) said: "Over the last five years we've re-engineered the majority of our business around what clients tell us they really want. While others sat tight and waited for the post-Lehman storm to blow over, we began investing heavily. It's a strategy that's paid off, with profit growth for the last two years underlining our progress."

Among the 20 largest firms by revenue, Irwin Mitchell and Eversheds join DWF as the fastest growers for PEP (see table). Those top 20 firms to have seen partner profits fall by more than 25% since 2007-08 are Berwin Leighton Paisner, Ashurst and Herbert Smith Freehills. 

Meanwhile, the majority of firms to have posted significant revenue growth since 2007-08 have done so on the back of major mergers and team acquisitions.

DWF sits way ahead of the pack for revenue growth, up almost 250% over five years from £54m to £188.2m. The last year alone saw turnover rise by 84.5%, fuelled by the takeover of Cobbetts in a pre-pack deal, as well as mergers with Scots firm Biggart Baillie, professional indemnity firm Fishburns and insurance litigation outfit Buller Jeffries.

Clyde & Co's 2011 merger with Barlow Lyde & Gilbert was a major driver behind a 115% revenue hike over the five years to £337m, while Kennedys has seen revenue grow 170% since 2007-08 to £117m, with key contributors including a 70-strong team recruited from failed firm Halliwells in 2009-10.

Kennedys CEO Guy Stobart said: "In our space in the market, where things are changing rapidly, you are either a firm which consolidates or one which will be gobbled up. I expect mergers and acquisitions to continue and we are definitely a consolidating firm with some momentum, our recent merger [with Gates and Partners last month] being an example of that."

Click here for a five-year overview of the UK top 20 firms

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