Travers Smith partner profits down 20% amid COVID-19 disruption

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PEP now ‘approximately £1 million’, says silver circle player

Travers Smith has revealed its latest set of financial results, with profit per equity partner (PEP) dropping sharply by 20% to “approximately £1 million” for the year ending 30 June 2020.

The silver circle player posted revenues of £160.9 million, a dip of 1%, while net profit (a figure it does not announce) fell 11%. The results are in stark contrast to its financial performance for the previous year, which saw revenue jump almost 11% to £162.5 million.

The firm said in a statement that the fresh figures reflect the the impact of the ongoing COVID-19 crisis and the uncertainty around Brexit over the course of the last year. It also cited “significant investment” in the firm’s people, systems and processes, which it say has enabled it to continue to operate effectively during the lockdown.

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“The last few months have seen trading conditions unlike any that we have previously experienced but, despite that, the way we have reacted to the COVID-19 crisis has exceeded all of our expectations,” Travers Smith managing partner David Patient said. “Inevitably, the lockdown, which coincided with the crucial last quarter of our financial year, has had an impact on our provisional year end results, with turnover falling by approximately 1% compared with last year.”

He continued:

“However, this year’s results come after an uninterrupted 10 years of consecutive growth. The previous two years, in particular, were stellar for the firm, with turnover increasing, year on year, by around 17% and 11% respectively, and profits up significantly in the same period.”

Fellow silver circle firm Herbert Smith Freehills this week reported a 2.5% rise on revenue to hit £989.9 million but a drop by almost 10% in PEP to £857,000.

Meanwhile, Ashurst revealed last week that PEP had fallen 7% to £903,000 following what the firm described as a “year of consolidation”. Its revenue slightly increased by 0.5% to £644 million.

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JD Equity P

Major ooof



The fact that some firms are still thriving with their PEP and revenue gone up during these times whereas other firms are significantly down in their financials is very telling…



Travers is a corporate and dispute resolution cog and the other departments are just smaller cogs working for corporate and DR. The bulk of their work is mostly dependant on how the economy is.



Not really comparing like for like in this instance, Travers look to have a shifted financial year compared to many firms so their reporting will be incorporating much more of the immediate COVID impact



This is correct. People here clearly aren’t considering this.


William H

“Approximately £1 million“ = 900,000 or so. Wording in that way makes it sound like the dip isn’t as bad as it actually is


Akin NQ

Contrast with US firm PEPs.


Just saying

This is proof that Macfarlanes > Travers Smith



Who cares? They both offer the exact same trainee salary and NQ salary. The salary progression at associate level and after is also the same. They’re both mid size and have the same working culture. They both have top corporate practices.

You’re distinguishing them based on PEP and revenue? That only matters if and when you get to equity partner level. That’s it.



This isn’t right. Travers financials are hit harder by Covid because it is much more of a national firm (at least on the transactional side). They dress themselves up as international because a merger might have an international element to it, but ultimately it’s just uk focussed. Macs teams up with firms such as Cravath so they can do properly big ticket international cross border work which is still going on despite Covid. Let’s see what Macs results are, but you’re deluded if you think a 20% PEP drop and falling revenue will only affect equity partners. Travers have already frozen salary bands (so you don’t go up a band even though your PQE goes up – which therefore means that taking inflation into account your pay goes down year on year). They also paid a 2.5% bonus which is slightly pathetic for those corporate associates who are billing 2000 hours.



So true. “International” as if…

What have they blown that cash on though?? Revenue only 1% down but taking this huge financial hit?



Should wait until the Macs results come out before making such judgements



Pending. Inside track is TS is sheet by comparison.



Macs Pep – Up 10%
Macs Turnover – Up 10%

Macs > Travers



Posting articles on the PEP and revenue financials itself of every single firm is pointless and quite frankly lazy journalism. What should actually be discussed is the financials of the firm in comparison to the COVID response.

There are firms who have significantly dropped in PEP and revenue but have still kept the NQ salary the same and retained their trainees properly whilst treating their vac schemers fairly too.

However, other firms who are not financially doing badly have used the COVID situation as a scapegoat to lower the NQ salary, reduce retention or offer NQ positions on fixed-term basis, cancelled their vac schemes etc.


Magic Square

This is true-I.e Slaughters, A&O, and HSF have all made drastic NQ cuts.

Travers and Macs haven’t. Just saying…



Smaller intakes, doesn’t necessarily mean they’re better than or rivalling MC firms or even HSF



Smaller intakes yes, but when you consider what the partners at slaughters and a+o usually make, reducing trainee salaries is a bit cheap really especially when you look at what Freshfields keeping things the same



Some of those firms have pay freezes, and the NQ cut serves to keep new 1PQEs paid higher than NQs.


Travers figures are for year ending June 2020 not March/April. More effects of Covid seen from other PEP results published.



Another interesting point from a number of these results is the level of ‘investment’ that some but not others suggest they have been making. This could be window dressing or it could suggest some firms had to scramble to get their tech in order for remote working whilst others who had previously invested are reaping the benefits now?



Travers didn’t furlough any staff and kept all staff on full pay throughout apparently, which might have contributed to a decrease in profit. They also re-branded this year which is super costly.


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