Coronavirus measures pay off for Reed Smith as revenue tops $ 1.3 billion and profits soar
Despite starting the fiscal year by reducing partner drawings in response to the pandemic, as well as other cost-cutting measures, Reed Smith has come up with a respectable set of results that have seen global sales rise to over $ 1.3 billion.
Total revenue this time increased 5% from $ 1.25 billion last year to $ 1.31 billion, while revenue per lawyer rose 4% from $ 778,000 to $ 811,000. However, earnings per equity partner (PEP) rose 16% from $ 1.3 million to $ 1.5 million, which along with the company’s 48 side partner hires in 2020, underscored the robustness of its results.
Sandy Thomas, global managing partner of Reed Smith, told Legal Business that London financials were flat from last year, but emphasized that London’s skills, resources and contribution to the company’s overall performance were incredible. He added: ‘The company’s base performance is based on our expertise in key sectors. In this sense, the relevance of London is enormous. ‘
Among London’s top contributions last year, litigant Peter Hardy advised on one of the first fully virtual court cases in April in a US $ 530 million dispute over a multi-jurisdictional courthouse. In other important mandates worldwide, the company advised Microsoft in the USA on the acquisition of the telecommunications business Metaswitch Networks.
The company can certainly be forgiven for being overly cautious about the pandemic a year ago, but even in the context of the 40% cut in monthly draws for stock partners and the 15% cut for fixed stock partners, the company appeared to be particularly strict. This came in addition to other austerity measures, including cuts in wages for lawyers and employees, cuts in working hours, vacation and layoffs.
Thomas commented, “We did what was best for Reed Smith at the time, rather than sticking our fingers in the air and following the industry. We were among the first to be completely isolated in all of our global regions. I did not take into account the speed with which the company worked successfully. ‘
Thomas concluded, “I am optimistic for 2021. Our global transaction pipeline is looking very good and there is already a high level of controversial work in all of our regions. But time will tell. ‘