RPC cites investment in new business and Brexit vote impact as net profit drops 8%
Profit comes in 'below expectations' as revenue rises 2%
July 04, 2017 at 05:56 AM
2 minute read
RPC has announced an 8% fall in net profit for the 2016-17 financial year, following the firm's investment in new business lines.
The net profit drop to to £26.4m comes alongside a modest 2% increase in revenue to £103m.
The firm has not yet finalised its profit per equity partner (PEP) figure for 2016-17. Last year, the PEP fell by more than 10% to £362,000, against a 6.6% increase in revenue.
Managing partner James Miller said: "We're pleased with the rise in revenue, given the unprecedented economic and political events in the last 12 months. However, profits have come in below our expectations."
Miller attributed the profit fall to investment in RPC Consulting, which launched in 2015 and targets core insurance sector clients, and the Centre for Legal Leadership (CLL), which launched earlier this year and provides coaching and support to in-house lawyers.
"Our continued investment in new business lines naturally had some impact on profitability, which was expected. But, as for other firms, the referendum and its surprising outcome affected the volume of work coming through the pipeline, so revenue was lower than we hoped."
CLL is the third consultancy business the firm has backed, following the launch of RPC Consulting, and RPC Perform, which was launched in May 2016 to provide management advice to GCs but has now closed down following the exit of director Julia Chain.
By region, Miller highlighted the firm's Asia practice as a strong performer. By practice area, he said the firm had seen "a strong uptick" in corporate, adding that commercial disputes and the firm's insurance business were doing well.
Miller officially took over from former managing partner Jonathan Watmough at the end of January. Watmough, whose departure was announced by the firm in December, went on sabbatical in July 2016 – ten months before his third term was due to end. Miller and corporate chief Tim Anderson served as temporary co-managing partners in the interim period.
RPC, which currently has 79 equity partners and around 300 other lawyers, has offices in London, Hong Kong, Singapore and Bristol.
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