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Financials 2013/14: Herbert Smith Freehills cuts its debt after ‘outstanding’ disputes performance

In the first full year of accounts since it merged, Herbert Smith Freehills has revealed its borrowings fell from £178m at the end of the 2012/13 financial year to £141m.

The firm said in the fillings at Companies House that the performance of its disputes practice had been ‘outstanding’, while in the UK, it highlighted the effect of the Belfast office which expanded its role to cover corporate and real estate work in March 2013. Firmwide, turnover for the 2013/14 financial year was recorded at £806m, generating an operating profit of £227m which, after financing costs and taxation, yielded £217m for division among member.

The 21% reduction in borrowing saw the amount falling due within one year fall slightly from £75m to £71m, but those borrowings due after more than one year dropping a considerable 31.4% from £102m to £70m. The firm also altered the denomination of debt away from being predominantly held in Sterling and Australian dollars towards a greater spread in Euros, US dollars and Hong Kong dollars.

Although the figures for the previous year are only from 1 October 2012 to 30 April 2013, they still reveal a slight drop in headcount from 3,950 initially after the merger, to 3,942 in 2013/14. However, this saw a rise in the number of fee earners from 2,180 to 2,209 while support staff shrunk from 1,770 to 1,733. The average number of members also decreased marginally from 358 to 353, though the highest paid member received £1.5m, up from 2013’s £1.2m. Staff costs for the 2013/14 financial year totalled £340m with £304m being spent on salaries.

For Legal Business analysis on Herbert Smith Freehills merger see: Consumed – Can burning ambition from Down Under recast Herbert Smith for the global stage?