06:13, July 13 172 0

2017-07-13 06:13:08
Harper Macleod growth slows as PEP continues to rise

Harper Macleod has posted a 3.5 per cent increase in revenue for the 2016/17 financial year, with total turnover rising from £25.7m to £26.6m.

The firm’s CEO Martin Darroch said the result reflected of “a very good year” coming as it did on the back of prior year growth of 17.5 per cent. “This means we’ve grown by 20 per cent over the past years,” he said.

The previous year Harper Macleod reported a much larger rise in turnover, with the figure increasing from £22.1m to £25.7m for the 2015/16 financial year.

At the time Darroch told The Lawyer that the 2016/17 financial year was likely to be one where the firm “consolidate[d] the significant additions we have made to the maximum benefit of our clients and our people”.

During 2015/16 Harper Macleod added five partners and five staff members from failed firm McClure Naismith and bolted on two-partner Shetland firm Dowle Smith & Rutherford. The previous year it took over private client practice Bird Semple.

Darroch added that during the 2015/16 financial year the top line had benefitted from a large insurance contract which had tailed off and finally ended in 2017. Personal injury as a proportion of total revenue at the firm has now dropped from around 20 per cent to 16 per cent.

“Strip that out and our actual underlying growth is 15 per cent,” added Darroch.

Average profit per equity partner for the firm’s 37 full equity partners now stands at £186,000, up from £180,000; while net profit, for distribution to full equity partners only, was £6.9m. The top of the equity is £508,000, with the lowest remuneration for full equity partners at £110,000.

The total remuneration to all of Harper Macleod’s 69 partners was £9.76m, making average earnings per partner £141,000.

Average revenue per lawyer rose slightly from £185,000 to £186,000 while the firm’s total year-end lockup position reduced from 105 days to 98, with debtor days in particular down from the year before from 72 to 60 days. Darroch said this metric had been progressively improving over the past 18 months.

“We’ve had significant growth over the past three years, with a lot of people joining the firm, and there’s been a process of education, ensuring that all of our engagement processes with clients are as quick and efficient as possible,” said Darroch.