11:58, July 11 63 0

2017-07-11 11:58:06
Stewarts Law PEP overtakes magic circle in record financial results

Stewarts Law has posted double-digit PEP and revenue growth, with its average profit per equity partner (PEP) beating the magic circle firms at £2m in its 2016/17 results.

The firm posted a 30.3 per cent PEP increase on the previous year, from £1.5m.

Total revenue was up by 25.1 per cent from 2015/16, growing from £62.4m to £78.1m. Over the last five years revenue has increased by 123.9 per cent with average PEP increasing by 124.9 per cent over the same period.

The total remuneration to all classes of partner last year was £44.4m, while net profit was £36.3m, compared with £29m the previous year.

Stewarts was one of the few firms to publicise its equity spread, which ranged from £968,000 to £2.4m.

Stewarts’ managing partner John Cahill said: “We are pleased to post another strong set of financial results. During the year, we concluded a number of long running cases and this has contributed to our strong revenue and profit figures.

“Our results reinforce our decision 17 years ago to build a diverse litigation-only law firm focusing on high value and complex disputes. In over 50 per cent of those disputes we are sharing risk with our clients through contingent fee arrangements including both damages based agreements and conditional fee agreements.

“Increasingly, this will result in ‘non-linear’ patterns of income which will in turn lead to fluctuations in profit.”

Over the course of the financial year, Stewarts has been involved in some of The Lawyer’s Top 20 cases for 2017, including the RBS rights issue litigation, in which partners Clive Zietman, Keith Thomas and Fiona Gillett represented a number of claimants that settled with the bank in December of last year.

Sean Upson and Andrew Hill are also advising 112 institutional funds in a £100m claim against Tesco over its £263m profits mis-statement in 2014, which led to £2bn being wiped from the retain giant’s share price.

The firm said the breakdown of revenue includes an adjustment of £1.2m in respect of the value of certain contingent work, which is understood to mean that the firm has probably estimated to pick up that amount from cases that are still in litigation.

Earlier this year, Stewarts Law called off preliminary merger talks with fellow litigation boutique Enyo, scrapping a deal that would have added £20m to its top line. If the merger had gone ahead, it would have added £20m to Stewarts’ revenue and brought Stewarts Law closer to its ambition to become the first £100m-revenue litigation boutique.