LLP filings show rapid growth of alternative legal centres at HSF
Firm's eight centres have grown revenue by 90% in recent years and have worked with almost all its top clients
February 04, 2019 at 11:18 AM
3 minute read
Libby Jackson
Herbert Smith Freehills' alternative legal centres have almost doubled in size in recent years, according to the firm's latest accounts, which display the rapid growth of such operations.
Revenues for the eight centres, which provide cheaper and more efficient legal and technology services, increased to £38m in the 2017-18 financial year, a 90% increase from 2012.
Last year, the turnover from the operations grew by 13% and they worked with three quarters of the business's top 100 clients, according to the division's global head and partner Libby Jackson.
She added that so far this financial year, the business has worked with 84% of those clients and that more partners than ever are engaging with the network.
The firm currently operates eight such offices in locations such as Belfast, Shanghai, Melbourne and Johannesburg, with the South African base doubling its fee-earner headcount to 27 since it launched in 2017, according to Jackson.
HSF will launch an alternative legal centre in New York – its first in the US – in April, with about nine legal technologists.
The Anglo-Australian firm has heavily invested in technology in recent years and spent £36m on it during 2017-18, which included the cost of implementing its new business system.
Elsewhere in the accounts, it emerged that the firm's key management personnel took home £9.3m in the last financial year, 9% more than the previous year.
The figure is an uplift from the £8.5m the group pocketed in 2016-17, with the firm attributing the rise to its 12% profit growth during the year.
The firm's highest-paid earner pocketed £1.7m, a slight rise compared to last year's £1.6m figure.
Staff costs at the firm stayed flat at £401m, with staff salaries accounting for £361m of that figure, up from £357m during 2016-17.
That increase came despite staff headcount dipping from 4,248 to 4,110 during the year.
The firm's total number of partners also fell from 374 to 347, while fee-earners dropped from 2,444 to 2,397.
HSF's operating profit rose from £248m to £254m during the year, which saw its profit per equity partner jump from £760,000 to £852,000 alongside flat revenue growth.
CEO Mark Rigotti previously highlighted the firm's continental European offices as having been particularly financial successful during the year, with the firm intending to expand its reach in the jurisdiction.
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