Cobbetts reveals flat figures but signs of "sustainable" growth
LAW firm Cobbetts has revealed a flat set of figures for the year to April 30, 2011, with turnover edging up by £700,000 to £44.5m, while net profit fell by £500,000 to £10m.
Managing partner Michael Shaw blamed the drop in profits on a £1.9m one-off cost of restoring staff from a temporary four-day week to a five-day week in May 2010. It also ended payment holidays on pensions and other discretionary benefits.
“When you look at last year, it was about a return to some kind of normality after three years in which we had to contend with a banking crisis and a subsequent recession,” he told TheBusinessDesk.com.
“It was a year in which we arrested the decline and then reversed it with some modest growth. OK, so that was was only in line with what’s been seen elsewhere in the sector but that average has been somewhat skewed by the London market and by insurance specialists.
“We’re still seeing some regional and national firms whose revenues are declining.”
Mr Shaw said that Cobbetts can now “see what we believe to be the early signs of sustainable growth in a number of areas” and had recently instigated a comprehensive pay review process.
“There’s been a team approach to it and that is what got us through the recession. Everyone contributed and everyone made sacrifices, but I know the staff appreciate how we sought to deal with things when times were bad.”
He highlighted positive revenue growth in its real estate (up 7%) and technology, media, telecoms and infrastructure (up 8%) divisions as examples of improved performance, but said the firm was targeting areas in which it has developed niches that are harder for competitors to replicate.
For instance, he points to its work in the “basic materials” sector – ie. advising overseas mining and minerals firms on fundraising activities on the London Stock Exchange.
“There were some Hemscott figures which came through last week which show that we’re not only number one in that market, but our lead is increasing,” he said.
He added that the firm had “a monopoly” of specialist knowledge on mutualisation which had won it a role advising government on plans to mutualise the Post Office. It has also set up a joint venture with The Co-operative to advise quangos seeking independence from the government under the Big Society initiative.
He believes that such a policy should mean that it is less threatened by the Legal Services Act than general commercial practices. However, he argues that the act will allow it to broaden its range of services – by coupling training and advisory services with its employment law offer, for example.
Cobbetts currently employs around 620 people – 300 of whom are based at its Manchester office.
