Money, Money, Money
Financials season is well underway, with more major players announcing their results this week.
So far, most firms to reveal their figures have had much to celebrate, with upticks across all key metrics— even as many management figures warn of a slower economic climate coming down the line.
Financial results can sometimes pose a bit of a conundrum to firms. In recent years we have seen management wrestle with the desire to both crow about gains, but at the same time try not to assign too much fanfare to figures such as PEP, arguing that their firms are so much more than those headline numbers.
One Magic Circle firm even toyed with the idea of not announcing their financials at all a few years ago, according to several in the know. That seems an extreme line to take, even though we can probably all agree with the wider point that, in an ideal world, firms’ selling points shouldn’t just be all about the money.
But as profits per equity partner at a range of firms continue to hit new heights, with several firms smashing through the £1 million or even £2 million barrier, those numbers will still continue to command the attention of their rivals and peers.
One firm to grab headlines this week was Macfarlanes, announcing a surge in PEP to hit a whopping £2.5 million. The figure means it outstrips the Magic Circle, with the highest PEP in that group still held by Freshfields Bruckhaus Deringer after it announced its results this week. All eyes now on Linklaters, the last left to announce out of the elite U.K. set.
Are Ince’s Dreams Over?
Ince has, to put it mildly, not had a brilliant 2022 so far. Hit by a cyber-attack in March which it has now said wiped almost £5 million off its bottom line, key management figures accused of mistreating a restaurant worker, and now a plummeting share price and rearrangement of top brass.
It announced on the LSE yesterday that it is undertaking a fundraise to bring in £8.6 million, adding that the amount was required to implement a “cost rationalisation programme.”
That programme will primarily consist of office and people cuts, with its Hong Kong base presumably in the firing line. The announcement stated that its operations there were “under review”, as its investment in its team had “produced substantial revenues but this has not led to similar cash returns”.
Also for the chop is current CEO Adrian Biles, who will resign and be replaced by Donald Brown, executive director of the company and CEO of Arden Partners—Ince’s financial adviser, which Ince agreed to acquire last year.
Brown may do well to look to Sir Nigel Knowles for inspiration when it comes to turning around the fortunes of a U.K. listed law firm. DWF has flourished under his guidance, choosing to undertake a similar-sounding cost-cutting measure including a major reduction in real estate worldwide in recent years. Perhaps a well-timed coffee would be a good idea.
Meanwhile, Law.com International continues to shine a light on overlooked areas of the industry with our exclusive rankings across several areas of diversity. This week, we revealed the firms with the highest proportion of disabled lawyers. Our coverage on this important issue will continue in the coming weeks.
