While turnover was up by a healthy margin at Hill Dickinson in 2010-11, profitability remains a concern.
Turnover (£m): 100.1
Average PEP: 272
Equity spread (£k): 151-347
Profit margin (%): 14
RPL (£k): 233
Revenue increased almost 15 per cent, from £87.13m in 2009-10 to £100.1m in 2010-11. Marine work increased, as did corporate (no small thanks to the acquisition of Halliwells’ Liverpool team) and real estate. But the biggest increase was in the fraud department, which grew around 30 per cent to £10m.
Net profit was up almost 7 per cent over the same period, from £13.5m to £14.4m, but the firm still has a lot of ground to regain in this respect after drops of 15 per cent in 2009-10 and 7.6 per cent the year before.
Managing partner Peter Jackson says the drop was partly due to an increase in volume work, but concedes that profitability is still an issue for Hill Dickinson. He wants to get average profit per equity partner, which sits at £272,000, back over £300,000 and has set loose the firm’s business analysts to scrutinise practice groups.
One area the firm is looking at is its gearing. In May 2011, Hill Dickinson merged its seven practice groups into four business units and replaced its separate management and LLP boards with a single board chaired by senior partner David Wareing. Management had become bloated following Hill Dickinson’s acquisitions; under the new structure more partners are now free to focus on fee-earning. More power is vested in the managing partner to make decisions and run the firm day-to-day. The wider partnership gets to vote on major changes, such as office moves (Hill Dickinson looks likely to move to a new location in London when its lease runs out next year) and mergers, although not lateral hires unless the new joiner will become a senior equity partner.
The firm still operates a managed lockstep where the top of equity is 70 points, but last year it ditched its 28-point floor after bringing in a number of lateral hires.