Weightmans’ net profit fell by 6.5 per cent during the 2015/16 financial year, from £10.7m to £9m, at the same time as the firm has vowed to overhaul its business strategy.
Turnover increased by 6.6 per cent from £89.2m to a record high of £95.1m. The growth in revenue was attributed to the firm’s acquisition of Leeds-based firm Ford & Warren in July 2015.
The increase in turnover follows slower growth the previous year, when Weightmans’ revenue grew by 2.5 per cent from £87m.
As a result of the firm’s fall in net profit average profit per equity partner (PEP) continued to decline from £308,000 in 2014/15 to £248,000. In 2013/14 PEP stood at £312,000, down from £338,000 in 2012/13.
Speaking to The Lawyer managing partner John Schorah said the fall in profits was partly due to a revaluation of the firm’s work in progress (WIP), which fell by £1m. The firm reviewed its WIP due to the growing amount of work in the personal injury space being fixed fee. The firm also saw an increase in costs due to investments last year, including its merger.
Schorah said: “We had some costs we had to soak in as a result of the acquisition of Ford & Warren and we took on an extra London premises last year so we were carrying more premises costs.
“Some time this financial year we will amalgamate the two London offices and the two Manchester offices will be merged the year after. There will be some additional costs this year due to that but then the following year we’ll start to see some substantial savings in terms of real estate.”
Weightmans’ borrowings also increased from £6.4m in 2014/15 to £9.84m last year. The borrowings were used in relation to the firm’s acquisition of Ford & Warren as well as the introduction of a new IT system across the business. Weightmans is now using Thompson Reuters’ 3E platform.
The firm is also gearing up to overhaul its business strategy and reorganise its internal leadership structure.
Schorah said: “The insurance claims space will still be an important part of our business but we would like to move towards an equilibrium of 50/50 with commercial work. That will mean being more aggressive on the commercial side.
“We want to move away from the traditional law firm practice area model and we will have one side of the business truly focused on the clients and the other side truly focused on doing the work in the most efficient way possible.”
This will involve the introduction of client-focused teams, which will be tasked with developing new revenue streams from existing clients as well as finding new clients.
As part of the new strategy Weightmans is also due to reduce the size of its board. The new-look board will include an individual dedicated to the client relationship aspect of the business as well as two lawyers focused on legal operations. The firm’s financial director and business services director will also remain on the board.
The post Weightmans overhauls strategy as profit falls to £9m appeared first on The Lawyer | Legal News and Jobs | Advancing the business of law.