Napthens hails record turnover, but IT incident impacts profit levels

North West law firm, Napthens, has once again reported record turnover during the financial year to March 31, 2024, but an IT incident has dented its profit levels.
The figures showed an increase of 5.4% in group turnover, up from £19.5m to £21.4m. Current projections suggest those figures will be significantly surpassed for the current financial year.
Pre-tax profits dipped from £5.1m to £4.5m, although Napthens said this was primarily because of a specific event which affected many law firms across the UK – the impact of an IT outage at a third-party contractor which suffered a cyber event in December 2023 – and something the firm said it has already addressed to mitigate against future such issues.
The Liverpool operation of Napthens continues to establish itself as a key asset, justifying the move to significantly bigger premises in The Plaza, 100 Old Hall Street in 2024.
The office revenue grew by 36.2% in the financial year to March 2024 and, like the rest of the firm’s offices, is on track to increase this even further for the current financial year, which will see the firm transition to a new leadership framework, with current financial director, Stephen Faulkner, moving to managing director, to provide more dedicated leadership and strategic support to the group.
The Preston-based firm, which has 25 partners and employs almost 300 staff at offices in Blackburn, Kendal, Liverpool, Lytham and Southport, said it will also continue its investment in people, with a particular focus on social mobility and providing apprenticeships to legal and non-legal careers in the legal sector.
The firm’s partners will share a £3.42m pot with the highest paid receiving £287,661.
Stephen Faulkner said: “The figures for the previous financial year reflect the resilience of our people in light of the unprecedented challenges the business faced during that period. The response of the teams and our recovery clearly demonstrates our success as one of the most innovative and fastest growing law firms across the North West.
“While profits have dropped slightly, we faced significant problems during the final few months of the financial year as a result of the outage, which is the only reason our profits were impacted. Mitigating against issues from third party suppliers continues to be a key focus for the firm, to reduce the impact from outside influences.”
He added: “Our long term growth plan to reach £25m annual turnover by 2025 is firmly on track, and we have continued to make significant investment in our people, our infrastructure, our support systems, recruitment and strategic projects, to facilitate this.
“The current financial year is on track to be one of our most successful ever with more exciting plans to deliver to continue our growth journey.
“As a firm we are investing for the long term and this is something we know will bear dividends, indeed, it is happening as we begin 2025.
“Personally, I’m excited about commencing my new role in April this year, supporting a really strong Napthens board and a strong partnership group, which is focused on achieving great things for our people, clients and the communities we operate in.”