Travers Smith’s profit per equity partner dipped 10% in the last financial year, one of the largest falls in the U.K. Top 50.
Average PEP decreased by 9.8% in the 12 months to June, the firm announced on Friday, falling to £1.1 million, compared with £1.22 million last year.
This marks a reversal of the PEP growth seen in 2021, which saw the figure rise by 21%. The U.K.-focused firm’s net profit also experienced a decrease of almost 8%, going from £68.4 million to £63.4 million. Commenting on the drop, managing partner Edmund Reed noted the timings of Travers’ financial calendar, which ends at the end of June as opposed to early April like most other firms. “Compared to others, we’ve had more of our year affected by Ukraine”, he said. “There’s been quite a big difference, actually, because others have had maybe a month where the war has been a factor, but we’ve had more like three or four.” Meanwhile, the firm’s revenue increased by 5.1%, to reach £195.2 million, although growth did slow in comparison to the previous year where it rose by 15%. Reed highlighted the firm’s key areas of focus, asset management and disputes and mergers & acquisitions.
“We’ve been busy over the last year, obviously, with client work, but also very much with investing for the future. We’re really putting the building blocks in place for the future.”
In May, the firm promoted its largest cohort of partners to date, appointing 11 lawyers, up by four from the previous year. Key mandates of the last financial year include advising long-time client Inflexion on the $1 billion takeover of MediVet and working on the McColl’s rescue deal. Looking ahead, Reed is optimistic about the firm’s position: “I think the key thing for us is that we understand what we are, where we’re going, and what we’re doing. And the partners buy into that, as does the wider firm. We’re in an investment cycle at the moment where that will bear fruit in in coming months and years, then that is what we do we manage, not for the short term. “So despite one year’s minor dip, as our turnover rises, we continue to invest and increase our partner numbers, we remain extremely confident of where we’re going.” Financial results this year, among U.K. firms, have tended towards growth, with rival U.K.-only outfit Macfarlanes boasting PEP of almost £2.5 million, and other firms such as Eversheds Sutherland and Herbert Smith Freehills also enjoying consistent increases.
However, Travers has not been the only firm to experience a decrease in PEP, with firms including RPC and Kennedys also seeing the figure go down.