04:18, July 24 88 0

2017-07-24 04:18:08
Burges Salmon breaks seven year growth streak with flat profit and PEP drop

Burges Salmon has broken a seven year revenue growth streak, posting a 0.4 per cent drop in revenue from £87.4m to £87m in 2016/17.

These results come after the firm posted its highest ever average profit per equity partner (PEP) in 2015/16, growing by 7 per cent from £488,000 to £523,000.

Last year, profit per member dropped by 11 per cent from the previous year to £383,000, while profit per equity partner dropped 17 per cent from £523,000 to £435,000.

Net profit followed suit, dropping by 3 per cent from £28.9m to £27.8m after equity partner numbers increased from 55 to 64 during the year.

Like many other UK-centric firms, Burges Salmon was affected by a slowdown of the market before and after the Brexit vote.

Burges Salmon managing partner Peter Morris said that although the firm’s first two quarters were relatively quiet, activity picked up significantly in Q4.

On the flat financials, Morris said: “I think it has followed on from particularly good year in 2015/16. The issue is straightforward. We haven’t had the profit growth that we planned to have.

“Our work levels picked up significantly in Q4. We ended the year with a very strong way.”

Last year, Morris gave an interview with The Lawyer in which he admitted (like many other firms) to not having a plan for Brexit. “We haven’t done scenario planning as such, because it’s very difficult to find out what assumptions one should make,” he explained. “We have been monitoring the debate very closely, participating in webinars and the like with leading accountants to try and find out what others are planning to do.”

However, the firm launched a ‘three-bucket approach’: sector focus covering private wealth, real estate, energy, infrastructure, transport, financial services and public sector; specialisms, if times are tough in one practice; and core services.

This change in focus has met with positive response from clients, examples of which are winning a place on the Crown Commercial Services’ panel earlier this year.

This has meant that Morris is “pretty optimistic” about the year ahead. “We started the financial year strongly and we are only two months into the year,” he commented.

Burges Salmon appointed employment partner Chris Seaton as its new senior partner earlier this year, taking over from Alan Barr who will step down after six years in the role.

The firm made three internal promotions to partnership;  Emma Folkes of the firm’s real estate team, along with Ian Tucker and Michael Ward of the dispute resolution department. Burges Salmon also made two lateral hires last year; Ashurst partner Jeremy Bell, Travers Smith partner Andy Eaton and Clifford Chance senior associate Chris Worrall.

“People are a long-term thing so we carried on doing what we felt we needed to do to meet clients’ needs in the long term,” Morris said.

For the year ahead, the firm plans to invest in IT and has already dedicated a seven-figure sum to replacing all of the firm’s front-end IT equipment to provide staff with roll-outs taking place across August.