Paul Ayre, managing partner, said the year ending March 31 2014 was “a challenging period” for Gordons LLP as pricing pressure in the legal market and the exit from personal injury and residential conveyancing work hit revenues.
The law firm reported turnover of £22.93m, down 11 per cent on 2013. Pre-tax profits fell 8.4 per cent to £10.16m.
Average partner pay was £295,998, down from £336,641. Gordons had 34 partners in 2014, one more than 2013, in a total headcount of around 250 people.
Asked about remuneration, Mr Ayre told The Yorkshire Post that Gordons is “among the most, if not the most, heavily invested law firms in the North”.
This means the firm is able to fund itself, rather than rely on third party capital such as bank debt for investment, he said.
Mr Ayre added: “As a firm we manage our cost base very effectively. This is a big contributing factor in our profitability compared to other law firms.”
Gordons, with offices in Bradford and Leeds, competes against mid-market rivals such as DWF, Irwin Mitchell and Lupton Fawcett Denison Till as well as the established ‘Big Six’ firms of Addleshaw Goddard, DLA Piper, Eversheds, Pinsent Masons, Squire Patton Boggs and Walker Morris.
Intense competition for corporate work and the rise of providers offering commoditised legal services has pushed down prices.
Mr Ayre said: “The whole sector is going through a period of change and we are not immune to that.”
Asked about the health of the legal sector in Yorkshire, he said: “I have thought for a long time there are too many law firms and the market they are serving is not growing.
“Having said that, it is historically a very strong legal sector and there are still a lot of very good lawyers and law firms operating in Yorkshire. It has got challenges but it is starting from a position of strength.”
He is predicting more consolidation in the sector and said some players have yet to grasp that legal services are going to be increasingly seen as commoditised services in a supply chain.
Gordons made a strategic decision to withdraw from claimant personal injury work and volume residential conveyancing, which hit the top line, to focus on general commercial services for business and corporate clients and private client services.
Big hires during the year include private equity specialist Simon Pilling, the former Addleshaw Goddard dealmaker, and the pensions team from Eversheds.
No product of the privileged elite
Unlike many at the top of the legal profession, Paul Ayre did not attend a public school and an elite university.
Instead, he grew up in a single-parent household in Newcastle after losing his father at a young age.
Like many children in the city, he dreamed of being a footballer but did not make it beyond the youth team at Newcastle United.
The academically gifted teenager chose to study law and moved to Leeds in the late 80s when the city was establishing its credentials as a powerhouse for legal services.
Under Mr Ayre, Gordons became the first law firm to set up an apprenticeship scheme to offer a way into the profession for children from less privileged backgrounds.