The firm’s turnover has dropped by 10% to £505m in 2015-16, down from £561m last year. PEP has plunged further still, with partners to take home an average of £603,000, 19% down from last year’s figure of £747,000.
The results mark a second year of declining figures for Ashurst, which posted single-digit drops in revenue and PEP for 2014-15. It means that since 2013-14 PEP has tumbled by 24.7%, with revenue declining by 14%. The average PEP figure that the firm has posted this year is the lowest at any point since 2004-05, when it stood at £567,000.
The firm said that on a constant currency basis revenue fell 5% between 2014-15 and 2015-16, from a like-for-like figure of £533m, with PEP down 15.7% from a like-for-like figure of £716,000.
Managing partner Paul Jenkins admitted that the results were “not what I wanted them to be” and blamed investments made by the firm to improve efficiencies, for impacting the bottom line. Jenkins also attributed the decline to the downturn in oil, gas and mining, China’s economic slowdown and “ongoing geopolitical uncertainty” for the firm’s poor results.
He highlighted growth in Asia and continental Europe (notably Hong Kong and Paris) and an increase in revenue in the financial services and built environment sectors as positives of the year. The firm also landed a number of key mandates, advising on matters including the Thames Tideway project and the Gala Coral merger with Ladbrokes.
News of the results follows a turbulent year for the firm, which is set to close offices in Rome and Stockholm, leaving Ashurst with a single Italian office, in Milan, and without an office in Sweden.
The past 12 months have seen a number of partners leave the firm. Most recently, Latham & Watkins hired Rob Moulton, Ashurst’s global co-head of financial regulation in London. In April, financial regulatory partner James Perry left for Gibson Dunn, a move that will reunite him with several former colleagues, including former senior partner Charlie Geffen. Later that month, London corporate partner Jonathan Parry moved to White & Case.
Speaking to Legal Week, Ashurst chairman Ben Tidswell (pictured) said partner exits had not dented the firm’s results.
“We are a big firm and we have a very diverse business – and we work on an institutional client basis. We don’t work on individual partner-client relationships and our experience is that when people go, we maintain the relationships and build from there,” he said.
The firm has made a number of key hires this year including Shaun Lascelles, Skadden Arps Slate Meagher & Flom’s former global co-head of private equity, who joined in London; and finance partners Scott Pierpont from Jones Day and Lee Ann Anderson from Sullivan & Cromwell, who joined in New York and Washington DC respectively.
Tidswell said the new partners recruited in 2015-16 would help boost profits.
“We need to capitalise on the investments we made last year. We hired some great partners who will make a significant contribution to the business,” he said.
The firm has also overhauled its management, with Jenkins taking over from James Collis as global managing partner in June, while co-corporate head Simon Beddow has been appointed to the newly created London managing partner role.
Tidswell said: “We have had a refresh of our management team and structure, which creates a different dynamic; we are very focused on a better performance and there is a strong desire to show we can do better.”
Ashurst’s 2015-16 results are the worst of any of the top 50 firms to have reported so far this year, though many have felt the impact of the more challenging economic conditions compared with 2014-15.
Yesterday, Clifford Chance announced a 3% revenue increase to £1.39bn and PEP growth of 10% to £1.23m.
Also announcing their results yesterday were Allen & Overy, which grew revenue by 2.3% while profit declined marginally; DAC Beachcroft, which grew revenue by 1.6%; and Shoosmiths, which posted a 4% revenue growth.