Partners at one of the world’s biggest law firms have enjoyed a pay rise despite currency movements taking the shine off revenues.
Although total profits available for partners at DLA Piper International, fell 2.4pc to £264m, with the number of partners falling to 682, the sum for each lawyer improved by more than £8,000 to about £387,000. The highest-paid partner received just under £2m for the year.
The rises came after the firm reported a 2.8pc fall in revenues to £765.7m for the year to April. The figures include the partnership’s activities outside North America and a handful of other countries.
It said the decline was caused by the weakening euro and Australian dollar against sterling, as well as a rejig in the company structure that took Turkey and Norway out of the figures. Some of London’s biggest law firms have reported similar headwinds from international currencies.
“We are very pleased with our profit share figures, and we have strong growth in profits per partner and revenue per lawyer,” said chief financial officer Paul Edwards.
The group cut its head count by 145 to 4,926. Globally, DLA Piper generates annual revenues of almost $2.5bn (£1.7bn).
The international partnership also improved its cash position and whittled down the last of its net debts, which five years ago were more than £53m.
Continental Europe is the international group’s biggest practice area, overtaking the UK three years ago as the firm invested heavily in France, Germany and other countries.
The European business turned over £289.7m, down nearly 6pc on the prior year, while the UK, which is not susceptible to currency movements, was broadly flat with revenues of £282m.
“London remains a really dominant market from our perspective. Our sweet spot has been cross-border M&A and that’s really active. Our European colleagues are aware of the strength and expertise in London,” said Mr Edwards.
However, even London’s elite Magic Circle firms are feeling the pressure from the world’s largest companies moving their day-to-day legal work in-house, with some of the banks employing more than a thousand people in their legal department.
“The biggest companies don’t want to pay high fees for basic work. We are doing less work that we feel we can’t do profitably,” said chief operating officer Andrew Darwin. “You can’t simply now be a good lawyer, you’ve got to have good sector knowledge and bring specialisms to the party, otherwise companies won’t spend the money with you.”
DLA Piper’s Australian business has continued to feel the pain of the commodity slowdown, and revenues dipped by nearly nine percent to £92.7m.
Several global law firms including Ashurst and King & Wood Mallesons have restructured in Australia in the wake of the drop in commodities-based work. DLA Piper’s Asian and Middle Eastern practices both grew in the year to April.
Source : http://www.telegraph.co.uk/finance/newsbysector/supportservices/12090494/DLA-Pipers-profits-per-partner-rise-despite-currency-shifts-denting-revenues.html