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HSF management committee pay down 17.5% as revenues drop

Herbert Smith Freehills (HSF) has posted a 17.5% dip in pay to its management committee as the firm’s turnover dipped for the 2014-15 financial year.

The firm’s international accounts say members of its global executive committee were awarded £8m, which is 17.5% less than the £9.4m paid last year. The highest paid member at the firm was paid £1.8m, up from £1.5m last year. The figures in the LLP accounts do not necessarily equate to the highest paid equity partner and can relate to ‘golden handshakes’ to retiring members.

HSF’s audited revenues were down to £793.4m to £796.4m, while profit before distribution was up slightly to £223.5m from £223.3m.

According to the filings, the performance was impacted by the weakening of the Euro and the Australian dollar.

The firm also said that London and New York performed ahead of expectations and the firm had a good year in China and Japan.

‘Regionally the group made significant progress in Germany, where in the space of two years the operations built critical mass and a full service capability and expertise to meet their clients’ needs.’

While net debt was reduced by £8.4m, gross borrowings increased to £128m from £120.4m. This was offset by a larger increase in cash balance to £69.9m from £53.9m.

The average number of fee earners was lower at 2,154 from 2,209, and total staff headcount was down to 3,892 from 3,942, staff costs rose to £386.1m from £381.1m.

In September last year the firm rejigged its global executive for the first time since its 2012 merger, trimming back regional management. As a number of management figures at HSF had their terms come to an end, the firm refreshed its leadership and slashed the number of regional managing partners in half.

Just four of the 11-person global executive continued in their roles, with co-chief executives Sonya Leydecker and Mark Rigotti, as well as global head of business services Nicole Bamforth and chief financial officer Nick Willmott retaining their posts.

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