SJ Berwin's unpaid partner profit distributions hit £18m

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Sofia Lind legalweek



SJ Berwin owes its partners around £18m in unpaid profit distributions, with the firm intending to pay back the entire sum once the markets pick up.

The UK top 20 law firm's management recently confirmed to partners the total figure it has held back from them in unpaid quarterly distributions since November 2008 and assured them that it will pay back the full amount.

SJ Berwin made only a partial payment of the quarterly distribution due to partners in November 2008 and since then has made only one full quarterly distribution in February 2009, although partners have continued to receive their monthly drawings, which range from £150,000 to £200,000 per year.

The firm has been keeping the capital in the business in an effort to shore up its finances during the economic crisis, previously stating that it was choosing to hold back profits rather than increase its bank borrowings.

The firm has yet to decide whether it will pay out some of the distribution due to partners this month. A decision is likely to be made next week on this payment, which could be made in early March.

SJ Berwin is heavily geared towards the private equity and real estate sectors, both of which have been hit hard by the financial downturn. The firm's exposure led to a fall of almost 50% in its profits per equity partner to £410,000 in the 2008-09 financial year, while revenues declined by 14% to £184m.

Recent weeks have seen an upturn in private equity activity though, with SJ Berwin winning a number of mandates, including a role advising private equity group Pantheon on its $755m (£490m) sale.

As previously reported by Legal Week, SJ Berwin has been reviewing its US strategy and has sounded out a small number of firms about merger possibilities.

SJ Berwin declined to comment.

SJ Berwin on the Legal Week Wiki





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