Turnover (£m): 87
Average PEP: 352
Equity spread (£k): 315-400
Profit margin (%): 16
RPL (£k): 259
After raising eyebrows with a savage round of redundancies and a consequent 83 per cent hike in net profit in 2009-10, Shoosmiths maintained its upward spiral of profitability with a new strategy targeting high-value, low-volume work.
While the past financial year saw the firm’s turnover continue to decline, sinking slightly from £90m to £87m, its profit margin surged from 12 per cent to 16 per cent. Average profit per equity partner leapt from £256,000 to £352,000.
CEO Claire Rowe admitted that profitability is an area Shoosmiths had earmarked for improvement. The firm’s consumer division, Access Legal, has also shifted its focus to low-volume, high profit-margin work.
Rowe and chairman Andrew Tubbs head Shoosmiths’ management board, which also includes the chairs of each practice group and the directors of finance, HR and IT.
Shoosmiths’ equity includes 38 partners out of a total of 104. The firm operates a modified lockstep, combining a five-year ladder, ranging from 25 to 50 points, with an added merit-based element. All partners are set annual objectives and appraised at the end of each financial year, at which point the firm’s remuneration committee, which consists of six elected partners, including Rowe and Tubbs, allocates a merit-based pay component.
The firm is currently developing its Manchester office, which opened last year, into a full-service facility. And despite recent partner defections to Trowers & Hamlins and DWF in Birmingham, Rowe said the firm is intent on growing its existing teams and offices rather than searching for mergers or bolt-ons.