UK 200 The Independents SAMPLE
Sample of the Lawyer's UK 200: The Independents report
The Independents 2020 SAMPLE
UK 200: The Independents
Before Covid-19 hit, 2019/20 looked on course to be another solid year for the UK Independents – the firms ranked 101-200 in the UK 200.
For the vast majority, trading was good, despite the bumps of Brexit and the general election, even if it might not have been quite as good a year as 2018/19 proved for many. But the impact of Covid-19 in March took its toll on a large number of firms, flattening revenue and profit growth.
Many of the firms which took a Covid-related hit have a high proportion of real estate work and found themselves impacted by the complete drop-off in residential conveyancing when lockdown was imposed in March; transactional work was also dented.
Revenue change SAMPLE
In 2018/19, 22 Independents saw revenue rise by at least 10 per cent. Last year, the number dropped to 20.
However, there was a significant decline in the number of firms posting growth of between 0.1 and 9.9 per cent. In 2018/19, 59 firms fell in this bracket; last year, 47 firms achieved this level of growth.
The number of firms seeing turnover drop rose from 17 in 2018/19 to 32 last year, demonstrating the pressure of the pandemic.
Revenue per partner SAMPLE
The increasing number of alternative business structures and limited companies in the Independents is pushing average revenue per partner (RPP) ever higher.
Last year, RPP as a calculation of total revenue divided by all partners was £565,200, 3.9 per cent up on £543,900 in 2018/19.
Chargeable hours SAMPLE
Just under half of all the UK 200 gave some information on their chargeable hours targets or the average number of chargeable hours achieved per associate last year, including 38 Independents. This gives us sufficient data to analyse again how productive firms are being – something which will be key to monitor in the current financial year, given the shift to homeworking caused by Covid-19.
As in previous years, the data shows a strong correlation between the size of a firm and its demands on its associates. The larger the firm, the more likely it is to have set – and achieved – higher chargeable hours targets.
Workspace trends SAMPLE
With the shift to flexible working caused by Covid-19, tracking firms’ use of office space is likely to be fascinating over the coming years. Already, several firms have put expansion plans on hold and others are hoping to sub-let floors in their buildings in recognition they simply do not need as much space as they once did.
A total of 43 of the Independents provided data on both the amount of office space they occupied, and the cost of that space for 2019/20. A further four firms said how much space they occupied, while Thrings gave cost of space only.
The economic damage created by Covid-19 means some law firms will lose clients
Trading Forecast SAMPLE
UK 200: The Independents
Research for the UK 200: the Independents report was carried out this year during the height of the coronavirus lockdown and while firms were grappling with what that would really mean for them – without any clear sight as to the future.
That macro background is evident in the answers to this year’s attitudinal questions, which display a pronounced sense of gloom about the coming 12 months.
Alternative working SAMPLE
“Firms will increasingly be forced to focus more on responding quickly to changing customer needs and less on internal management and financial mechanisms. It is important that changes are driven by the clients and clients want to deal with good people,” Howes Percival noted.
Firms also identified areas where they think business life has changed for good. The biggest impact looks set to be on business development, which has gone virtual during lockdown and is likely to remain that way for the foreseeable future.
Even if face-to-face meetings start to return – and many firms would like to see this – at least a portion will be permanently replaced by video conferencing.
There is also likely to be a change in the style and culture for many.
Shape of the profession SAMPLE
The Independents were split on their response to the question asking if they thought that disputes would contribute a “significantly higher” proportion of revenue in 2020/21 than last year.
Firms predicted consolidation across a wide range of sub-sectors
Firms predicted consolidation across a wide range of sub-sectors, but high street, real estate practices and personal injury firms were identified as being the most at risk of consolidation activity.
Stephens Scown suggested there is likely to be an increase in larger firms with smaller hubs spread across a wider geographical area, due to consolidation among medium-sized firms. Those firms with the financial capacity to bolt on smaller practices look likely to have plenty of opportunities for expansion ahead of them.
UK 200: The Independents
As in previous years, the UK 200 looks at the proportion of lawyers and partners in its constituent firms who are male and female.
In 2017/18 women made up 33.5 per cent of the Independents’ total partners, rising to 36.3 per cent in 2018/19. In 2018/19, the average female partner proportion was 35.9 per cent.
The proportion of women across the Independents rose from 51.8 per cent of lawyers in 2018/19, and the average proportion rose from 50.4 per cent the previous year.
The firms with the most women SAMPLE
As in previous years, many of the firms with a high proportion of women specialise in areas that have traditionally attracted female lawyers, such as family, employment and private wealth.
A further 49 firms reported that women represented at least a third of their partnership last year. This is the same number as in 2018/19 and the group represents a broad swathe of the Independents, both in terms of region and practice focus.
The firms with the fewest women SAMPLE
Women represented less than 20 per cent of the partnerships at 11 Independents last year and between 20 and 24.9 per cent of the partnership at a further seven firms.
As in previous years, the group includes a disproportionate number of London-headquartered boutiques – including not just JHA, but firms such as Memery Crystal, Simons Muirhead & Burton, Enyo Law, Lee & Thompson, Payne Hicks Beach and Collyer Bristow.
As many of the Independents are fairly small, the addition of only a few women can mean a significant proportional increase; for example, Bott added three female lawyers but that was an increase of 300 per cent.
When it comes to partner numbers, many of the significant proportional changes also represent the gain or loss of only one or two female partners.
Firm Profiles SAMPLE
UK 200: Independents
101. Boodle Hatfield
Boodle Hatfield broke through £30m for the first time last year, recording turnover of £30.3m. Revenue rose 5.7 per cent from £28.7m the previous year, representing a slowdown in expansion compared to the two previous years.
Net profit rose 13.7 per cent from £8.6m to £9.8m. Boodle Hatfield’s profit margin last year was 32.3 per cent, up from 31.1 per cent in 2018/19. Average profit per equity partner dropped 6.3 per cent from £660,500 to £618,800 after the firm increased the size of its equity partnership.
Revenue per lawyer stood at £405,900, up 4.7 per cent from £387,800. Revenue per partner also continued to rise, up 3.7 per cent to £930,200 from £896,900.
Business mix: Private client and tax is Boodle Hatfield’s largest contributor to turnover, last year generating 37 per cent (£11.2m) of the top line. Performance was driven by an increasing number of international mandates in particular.
Real estate contributed 34 per cent of income, a drop from 2018/19. Corporate’s contribution was stable at 12 per cent, with litigation adding 10 per cent and family 7 per cent of turnover, similar to the previous year.
Boodle Hatfield hired Weil, Gotshal & Manges counsel Simon Gorham as an employment partner, and Blake Morgan legal director Navpreet Atwal as a construction partner towards the end of the year, filling gaps in its offering.
Operational: Boodle Hatfield’s strategy remains that of focused growth in its core areas.
Last year, the firm agreed to invest in a new practice management system, which is being implemented in the current financial year.