Profits crash 40% at Manches

Net profits at Manches have fallen a massive 40% from £3.7m to £2.15m.

Partners who were previously earning an average of £235,000 are now on just £135,000. And of course that is the average figure, so some junior partners will be on an awful lot less than that: quite possibly less than some of their own associates. Ouch.

The firm has had a tough run recently. Its new CEO, who was appointed to try to shake things up a bit, resigned a year ago after only 18 months in the job. Her predecessor lasted only six months. An associate was arrested on suspicion of theft, five lawyers (including star partner Helen Ward) left for Stewarts Law and there were rumours of a massive £7m overdraft facility. Although luckily it's still managed to find enough cash to sponsor a yacht race...

This year's entry

Other firms which seem immune from the UK economy's last quarter 0.6% growth include Bevan Brittan, where equity partners saw a 15% drop in their profits. And Dundas & Wilson which, after cancelling its graduate recruitment and waving goodbye to four partners in a week, saw a 22% fall in partner drawings.

Melvin Pedro, Manches' Managing Partner, said "our financials from last year don't tell the whole story. Last year we lost a star family team, however this year, we are seeing the benefit of a good upturn in our transactional business and our cost-cutting programme. We'll be announcing a number of lateral hires soon. Roll on Monday."

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Comments

Hard times for mid-level firms. The Scotsman reported on 25 July 2013 that partners at Maclay Murray & Spens saw their average share of profits drop by 22% to £211,000 in the year to 31 May.

I think you'll find the Scotsman report related to Dundas & Wilson. I would think the partners of MMS would sell their own grandmothers to achieve an average PEP of £211K. They have been ominously silent on 2012/13 results.

No - the Scotsman article related to MMS. Looks like the partners' grandmothers are safe for another year

http://m.scotsman.com/business/management/profits-drop-at-maclays-as-big-four-swap-places-1-3013096

The article he/she refers to was in respect of MMS - figures surprised me too!

That may possibly be the average PEP of the limited number of partners in the top band, but not the average PEP of the equity partnership as a whole.That figure would be grim if revealed. It also needs to be remembered that profit for 2012-13 has been boosted by the sale of and profit from the last subsidiary company.There is nothing left in the kitty for 2013-14 to disguise the turnover being in free fall.

I suspect an element of smoke and mirrors around those MMS numbers, although they did lose quite a few partners during the year in question who won't be contributing to this year's numbers. Still, I am sure there are a handful of people who continue to trouser a healthy return for what they contribute. It's not what you know, you know.