Cobbetts expands into Cairo
LAW firm, Cobbetts has launched in the Middle East and North Africa as the firm looks to respond to strong demand from the locality and capitalise on its substantial experience in international markets.
The launch came as the firm saw profits for division among partners fall to £8.1m for the year to the end of April 2009, from £15.7m a year earlier – a drop of 48%.
Cobbetts has been hit by the slump in the corporate and commercial property markets and in August it cut salaries by 20% as it introduced a four-day week across a large part of its practice.
A spokesperson for the firm confirmed that the four day week was still in operation, but added that the situation is being reviewed on a monthly basis.
The firm had reported in June that 2009 fee income had fallen 16% to £47.5m but did not disclose is profits.
Last month Cobbetts strengthened its financial position with a new £9m funding package from the Royal Bank of Scotland.
The facility comprises a £2.5m overdraft facility and £6.5m term loan, repayable over five years. Since 2008 Cobbetts, which has offices in Birmingham, Leeds and London, has increased its lending from £2.9m to £8.9m.
Managing partner Michael Shaw explained that bank borrowings had increased because of the initial cost of making redundancies, but added that these would be significantly reduced during the current financial year.
He added: “We have avoided calling on partners to increase the aggregate capital employed within the business, and are on course to reduce borrowings significantly in the 2009/10 accounting period.”
Turning to the overall performance Mr Shaw said the results were satisfactory in challenging year and added that having taken “decisive action” the firm’s future prospects were good.
He said: “The unprecedented combination of the initial slowdown in the economy, the banking crisis and subsequent prolonged contraction of the economy had a severe impact upon the markets in which we operate, with an obvious detrimental effect upon turnover and profit.”
The move into Cairo is on the back of Cobbetts’ corporate team winning a significant mandate in the MENA region.
In order to formalise its cross-border associations, Cobbetts has established a Swiss Verein structure – Cobbetts International – which will enable the firm to react quickly to international opportunities by harnessing the expertise of local partners.
Cobbetts and the respected Egyptian firm, Cairo-based El Said Darwish & Partners, have become the first two independent members of Cobbetts International. The latter will now be known as Cobbetts International Cairo.
Cobbetts International Cairo will provide a wide range of legal services through specialised practice areas, including energy, aviation, real estate, corporate and commercial, dispute resolution, banking and finance, mergers and acquisitions, tourism and entertainment and training.
The firm’s key Egyptian clients include PICO International Petroleum, Nile Stock Company SAE, Arab African International Bank, El Faisal Holding, BG Egypt, Seldar Misr SAE, Arab Investment Company SAE and Delta for Tourism and Hotels SAE.
Mr Shaw said: “Having experienced strong demand for our services in the Middle East and North Africa over recent months, from both longstanding and new clients, it became apparent to us that we needed representation in that area.
“Alongside our natural resources team, we also feel that there are strong opportunities in the region for our other specialist sector practices.”
Bearing in mind the current instability in certain areas of the Middle East, Egypt provides the firm with a stable environment from which to securely develop its profile and presence in the MENA region,” he added.
“Our colleagues at Cobbetts International Cairo are also extremely well-connected and enjoy excellent reputations derived from their extensive experience in acting for major international companies,” said Mr Shaw.
The firm is actively seeking similar opportunities with other practices operating in its chosen international markets.
