Hammonds (London)

$0Our view... $0$0National firm Hammonds recently embarked on a massive policy of expansion, but has thus far failed to deliver the goods. $0$0In 2003-04 the firm’s profits per partner fell by 17.5% to £272k. In 2004-05 they were down to a miserable £204k, a staggering drop of 25%. Figures for 2005-06 were a massive improvement - up 61%, the biggest rise in the City.$0$0And figures for 2006-07 were better still - up 23% to £404,000. But it still lagged well behind its competitors, and turnover only managed to improve by 3% - at a time when other firms were posting double digit increases. Add to that an ex-trainee dishing the dirt in a novel, a urinating shoe fetishist and mass redundancies, and it was clear that Hammonds still had a way to go.$0$0Sadly this year fortunes seemed to turn for the worse again. Turnover fell by over 3%, while PEP dropped to £367 000. Worse still, it also announced that 42 fee earners in the firm’s corporate and real estate departments were facing redundancy. Hammonds still has a lot to prove.$0$0After Hammonds took over Edge Ellison in 2000 the firm managed to soak up the merger costs and even post a tidy profit. Since then it has set up offices in Berlin, Munich, Paris, Hong Kong, Turin, Milan, Rome, Madrid and Aosta. The previously provincial firm - offices in Birmingham, Bradford, Leeds and Manchester, plus London and Brussels - had set out its global ambitions.$0$0However, while this may all sound very promising for trainee secondments, overseas offices are very expensive to set up and maintain. The chance of a stint in Paris or Berlin sounds all well and good, but is basically useless if it is not accompanied by high quality work. And, certainly in London, the firm is struggling to provide this.$0$0Part of the problem is that, unlike some of its more successful competitors, the firm has failed to shed its provincial image. Time and again the high profile clients are content to use Hammonds for their day to day work, but turn to the big City players when they have serious deals to be done.$0$0For a time it looked as though it was going to mount a serious assault on the AIM market after advising on 13 flotations in 2004, but partner departures took their toll and set the firm back. The London office does retain some highly rated niche departments - notably sports, employment and advertising and marketing - but remains decidedly shaky in the core bread-winning areas. That said, it does boast some big name clients: Aldi$0and Lloyds TSB to name a couple. $0$0The firm’s continued poor performance has inevitably had an effect on morale. At the end of 2004 a group of partners from the Leeds office even sent round a memo questioning the firm’s direction. Matters were hardly helped by the declaration at the start of 2005 that the firm was making sixty staff redundant, including thirty fee earners. Or when it begged its partners to pay back some of their drawings through fear of a profit crash. Many partners subsequently voted with their feet.$0$0On the bright side, a firm-wide bonus scheme has been introduced under which everyone is rewarded if the firm exceeds targets. Hours vary from group to group, but are rarely in the Magic Circle league - it seems to present more of a lifestyle choice than the more traditional City based firms. In the words of one junior associate, “the prospects are better than many places and it comes without the bullsh*t of many other firms. There also isn’t the ridiculous need to stay late just to impress people”. An NQ comments that “things have turned around recently and management have made a big effort to keep people happy - particularly with the new pay levels for NQs”.$0$0The firm has also finally abandoned its bizarre “location rotation” training system, where trainees were expected to spend time in at least three of the firm’s offices. All well and good if you wanted to see more of the country, but not so if you were even vaguely attached to your wife / boyfriend / West Ham season ticket. You’ll now do six seats in one location, with the possibility of spending one of them overseas. Bear in mind that the firm still has a policy of paying a flat rate salary to trainees across the country - not too bad if you’re in Leeds, but you’ll be on two thirds what you'd get at most London firms.$0$0The firm can take some comfort from the fact that when its partner lock-in ended in summer 2006 there wasn't the predicted rush for the door. Managing Partner Peter Crossley is immensely popular with his junior staff, and seems to be steering the firm through turbulent times. And on a serious plus point, as we reported in 2008, Hammonds is statistically the best firm to train for those who want to make partner. $0