Freshfields Bruckhaus Deringer has become the third Magic Circle firm to release its 2013/14 limited liability partnership (LLP) filings with Companies House, showing the firm’s profits increasing, ‘before the movement in the provision of partner annuities’, by 7% to £528m off the back of £1.28bn in revenues.
Staff costs at the firm fell from £554m to £548m despite an increase in salaries to £466m in 2014 from £449m in 2013. The rise in wages came as the firm increased fee earning headcount by 2.3% to 2,573 from 2,514 while maintaining secretarial and support numbers flat.
The average number of members at the firm grew by two to 334 in 2014, with the highest paid member, including payments relating to retirement, taking a 24% drop from £2.5m in 2013 to £1.9m.
Revenues at the firm grew slightly from £1.23bn last year in 2012/13 to £1.28bn, while total assets on the consolidated balance at Freshfields grew 7% from £896m to £961m, while loans and other debts due to members decreased 12% from £532m to £469m.
However, the firm’s cash on hand was down to £42.9m in its last financial year, from £55m in 2012/13. The net cash flow from operating activities also dropped 4%.
Profits for the year were distorted as the firm increased the rate it discounted future obligations to provide retirement annuities from 3.8% to 4.2%. The increased discounting meant that the provision made to pay for the annuities fell by £65m as of 30 April 2014.
However, the accounts record a 23.7% jump in operating profit from under £416m in 2012/13 to £514m while profit available for discretionary division amongst members which also peaked from £312m to £552m.
In the filings, the firm said: ‘Despite some continued global challenges, there is greater stability in many markets.’