Hey, it's a business.
Extremely profitable law firms have been claiming furlough payments even as their equity partners pay themselves huge sums.
The UK government has published the names of businesses which claimed furlough cash between December 2020 and April 2021.
Reed Smith's latest results show that its global revenue increased by 5% to $1.31 billion last year, and its equity partners were paid an average of $1.5 million, up from $1.3 million the year before.
But every little helps, so the firm has continued to accept the generosity of UK taxpayers, long after it rolled back the 40% reduction in monthly drawings for Reed Smith's equity partners which it imposed as a precaution against the impact of Covid.
A Reed Smith spokesperson told RollOnFriday that until recently six staff from its facilities team were on the flexible furlough scheme, working alternate weeks. The firm did not respond when asked if it had any intention of paying the money back.
Lots of other firms have reimbursed the government after their financial performances exceeded expectations, including Norton Rose Fulbright, DLA Piper, Burges Salmon, DAC Beachcroft, Osborne Clarke, Irwin Mitchell and Eversheds Sutherland. Some, like Clifford Chance, never claimed any money in the first place.
However, RollOnFriday can reveal that several other firms are still extremely keen on the publicly funded Covid kitty and have extracted even greater amounts than Reed Smith, despite enjoying a bumper 2020.
The government’s database shows that Scottish firm Thorntons took between £250k and £450k in furlough payments between December 2020 and April 2021, despite recording an £8m profit last year. On average, the firm actually paid its partners £15k more in 2020 than in 2019, and its highest paid partner raked in £260k, which was £35k more than in 2019. Thorntons declined to tell RollOnFriday how much it had claimed in total from the furlough scheme or whether it would be paying it back.
Thompsons Solicitors, which specialises in representing unions, called on the proletariat to alleviate its pain by claiming up to £250k in furlough cash in the five month period to April 2021. Yet the firm recorded profits in 2020 in excess of £7.5m, enabling Thompsons to defy Covid expectations and pay its highest-earning partner £404k, £50,000 more than the year before. Up the workers!
Tom Jones, head of policy at Thompsons, told RollOnFriday, "As a firm, we have staff who for various reasons we have had to furlough".
Jones said, "The first priority for any profits will be to recognise all our staff for what they have been through. We will look to furlough repayment once the financial ramifications of the pandemic - for us a significant fall in personal injury case intake which has implications in future years - have been fully assessed".
Of course it won't need to recognise former staff, like those on fixed term and locum contracts it axed during the pandemic.
Ince Gordon Dadds, which won the Golden Turd in 2019, claimed up to £100k in taxpayer cash between December and March, despite having recorded a massive profit in 2020 of £18.8m, over £15 million more than in 2019.
Ince Gordon Dadds also declined to disclose how much it had claimed from taxpayers in total, or whether it would pay it back.
Meanwhile, Plexus Law, another personal injury firm and former Golden Turd winner (is there a pattern here?), claimed up to £275k in furlough cash over the five month period, having made £11 million in profit in 2019. The PI firm may have hit choppier waters since then, but it's not possible to tell as Plexus's latest accounts are four months overdue. The firm did not respond to a request for comment.
Other firms appeared in genuine need of furlough cash, though not necessarily because of Covid.
Personal injury specialist Simpson Millar has recorded substantial losses for several years, going so far as to teach its lawyers how to use less milk in their tea. Its previous owner, Fairpoint Group, went into administration in 2017 and a funder, Doorway Capital, has been propping up the firm ever since.
Simpson Millar made a £7.7m loss in 2017, a £6.3m loss in 2018 and, according to its latest accounts, a £5.6m loss in 2019. Which might explain why it has claimed such an enormous amount from taxpayers: the latest government figures show the firm took up to £850,000 in furlough money between December and April this year. It did not respond to a request for comment.
RollOnFriday has been told that a number of firms have taken furlough cash and told staff to keep in confidential. If this has happened at your shop, please let us know in confidence here.