Birmingham law firm Martineau saw profits drop by almost a quarter in a year after commercial work was crippled by the recession.
The international firm – which appointed new senior partner Andrew Whitehead less than two weeks ago – saw revenue shrink by nine per cent to £21.2 million.
And Profit per Equity Partner – the measure of profitability of law firms – dropped 24 per cent, with overall profits of £6.1 million.
Management at the firm said the drop in profits and turnover was broadly in line with their own predictions. They added the change of focus the firm had gone through over the last year, to focus on more future-proof sectors, would put it in a good position going forward.
Bill Barker, the managing partner of Martineau, said: “The immediate feeling within the firm is one of disappointment, but when the highlights of the year are taken into account, everyone in the firm can take great satisfaction in their efforts throughout what has been a tough year.
“I know the firm is fitter, in better shape and more ready for the fight to come, than ever before. We did more business than we expected and grew important areas of the firm – we now have the proof that our business model and strategy are correct; we will now follow them explicitly and greater success will surely follow.”
Corporate and real estate work were the worst affected, as in the rest of the sector. But the firm said there were some encouraging signs from specific divisions.
The investment funds group, headed by senior partner Roger Blears, led the way with a 22 per cent increase in business, with the crisis in bank lending driving growth in alternative funding. The technology group rose two per cent and education climbed 14 per cent. The energy division grew by five per cent.
It also saw an uplift in international work through its membership of Multilaw, the international network of law firms, with China in particular offering great opportunities for growth with its rapidly expanding economy.
Closer to home, Martineau advised on corporate deals with a total value in excess of £1.5 billion, with the Real Estate group advising on property transactions also worth more than £1.5 billion, a tremendous effort in what has been a particularly testing year for that industry sector.
Most significant was the growth at the energy department, which the firm took as a vindication of their decision to focus heavily on that area as a potential growth area for the future.
Earlier this month, the company announced energy specialist Andrew Whitehead as the new senior partner of the firm. He will be replacing Mr Blears from the start of next year.
Mr Barker added: “I believe the economy has now weathered the worst of the storm and we are entering a period of relative stability, which will also throw up opportunities for growth.
“I expect the more agile firms like Martineau to be better placed to take advantage of these opportunities when they arise. Much of the real estate group’s work was for our growing list of education clients and it is perhaps our expertise and reputation in this largely recession-proof sector that has helped us achieve the results we have announced – I‘m proud of what we have done and look forward to the challenge ahead – I just hope it‘s less scary than the last 12 months.”
The firm added it was pleased to have avoided having to have made redundancies, and had brought in plenty of high-quality new members of staff.