Shoosmiths 2008-09 partner profits plummet by 54% to £150,000 PEP

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Claire Ruckin the inquirer

Shoosmiths has reported a marginal drop in turnover for 2008-09 but seen profits per equity partner (PEP) plunge by 54% - the biggest drop in profits at a top 50 firm to date. Shoosmiths? PEP plummeted by 54% to £150,000 for the last financial year down from £327,000 in 2007-08. Revenue dipped by 4%, falling from £103.4m in 2007-08 to £99m.

Shoosmiths has reported a marginal drop in turnover for 2008-09 but seen profits per equity partner (PEP) plunge by 54% - the biggest drop in profits at a top 50 firm to date.

Shoosmiths’ PEP plummeted by 54% to £150,000 for the last financial year down from £327,000 in 2007-08. Revenue dipped by 4%, falling from £103.4m in 2007-08 to £99m.

Corporate and property both saw fee income drop but employment, litigation, debt recovery and insolvency all increased income compared with the previous year.

Shoosmiths’ chairman, Andrew Tubbs attributed the heavy drop in PEP to continued investment, including the January opening of an office in Manchester, and the firm's decision to hold-off making redundancies for as long as possible.

He told Legal Week: "Our profit is disappointing but not something that comes as a surprise. We held off of restructuring for as along as possible even though we knew that would hit our profit. The savings of the restructuring will not feature in the last financial year but will show up in the 2009-2010 year. We opened in Manchester earlier this year as we see it as a tremendous legal market and a good place to be but there was huge costs involved in that in terms of the infrastructure of the office and recruiting people - both of which hit our profits - however, the Manchester market is right for us going forward, we also recruited three new equity partners."

In May, Shoosmiths launched a redundancy consultation affecting 25 fee earners - including partners - and 44 support staff, across all of the firm's offices and most practice groups, including corporate and real estate. Last July the firm made 28 job cuts in its Northampton-based consumer residential conveyancing group.

Earlier this year the firm boosted its corporate practice with a trio of equity partner hires - former Hammonds equity partner Martin Letza as well as Crispin Bridges Webb and Chris McClure - previously partners at Eversheds and Blake Lapthorn respectively.

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