30 Aug 2022

Travers Smith posts 5% revenue increase as tougher trading environment dents PEP

Leading London independent points to 'healthy' business despite 'increasingly turbulent macro-economic backdrop'

Portrait of Edmund Reed

Edmund Reed

Top 35 UK law firm Travers Smith saw revenue rise 5% over the past financial year amid a weakening macro-economic environment, which contributed to a 9% fall in profit per equity partner (PEP).

Turnover increased to £195m in the financial year ending June, up from £185.7m in the previous financial year. PEP came in at £1.1m, down from last year’s £1.22m but still above where it was in June 2020 (£1m) when the early months of the pandemic dampened earnings.

The fall in PEP is in contrast to many of the firm's London-based rivals, most of which saw PEP grow, however Travers Smith is distinct in that its June year-end is two months after most UK firms.

That difference allowed the firm to benefit more from record deal markets last year — when PEP jumped 21.5% — but conversely more exposed to the recent market slowdown commented on by a number of managing partners on the release of their firm’s financials, including Ashurst global CEO Paul Jenkins and Macfarlanes senior partner Sebastian Prichard Jones.

Travers Smith managing partner Edmund Reed said: “Over the last few years the world has been a volatile place, with the consequences of the Brexit vote, the Covid pandemic and consequent economic disruption which increased yet further over the final third of our financial year following the outbreak of hostilities in Ukraine and the subsequent impact on rising costs across the globe.”

He added: “Despite this increasingly turbulent macro-economic backdrop, our business continues to be healthy, and our people continue to perform to an incredibly high standard, with every team across the firm contributing to these resilient results.”

The firm also made a record 11 partner promotions in May, reflecting its focus on three core areas: alternative asset management, cross-border M&A and global disputes and investigations.

Over the past 12 months the firm’s asset management team advised UK pension scheme Nest on its partnership with Schroders Capital to invest in private equity assets and Hermes on selling a stake in $1.2bn-worth of private equity funds and co-investments to BT’s pension scheme.

The firm’s M&A team advised Brewin Dolphin on its recommended £1.6bn takeover by Royal Bank of Canada’s wealth management unit and the founders of Inflexion and other shareholders on the sale of pet care chain Medivet to CVC Capital Partners. Meantime, its disputes team advised Hewlett Packard Enterprise on $5bn of fraud claims related to its $11bn acquisition of British software company Autonomy Corporation in 2011, in what had been dubbed the ‘tech trial of the century’.

The firm said it has also launched an agile working protocol as it adopts to the post-pandemic working environment. An internal survey found that 85% of its employees said the new protocol is having a beneficial impact on their wellbeing. As well as providing free breakfast and lunch to employees, the firm has also launched a new ‘coffee with a colleague’ initiative which randomly pairs up staff members for in-office coffee meetings to ‘strike up new connections in a hybrid world’.
 

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