LB25 firm Irwin Mitchell has slashed the amount given to its highest paid earner by 30% from £1.22m to £849,000, despite a lift in profits, the firm’s accounts show.
The accounts, which cover Irwin Mitchell’s LLP as well as its alternative business structures, said the firm had almost 8% more fee earners in 2014/15 from 1,256 to 1,351 and eight more administrative staff to 809 people. This lead to an increase in the firm’s payroll costs by 7% to £70.13m from £65.51m.
The accounts also reveal the firm’s net cash position at 30 April 2015 has improved from a deficit of £713,000 to a positive balance of £801,000. The firm has a £45m revolving credit facility and a £15m bank overdraft which runs until March 2018.
While the firm has more cash in the bank, the amount it owes to creditors has risen – the firm reports trade creditors are owed £49.63m up from £39.94m, while other creditors are owed £90.7m from £72m. The sum owed to other creditors includes cash deferrals relating to recent acquisitions Berkeley Law and MPH Solicitors.
Irwin Mitchell announced its takeover of private weath boutique Berkeley in November 2014. The accounts show the transaction valued Berkeley at almost £9m, made up of £4.6m in shares, cash of £1.75m and deferred consideration of £2.6m.
The acquisition of MPH Solicitors, which was bought in November 2013, brought in £3.4m in turnover and £1.2m in operating profit in its first full financial year to April 2015, was also part purchased on a deferred credit basis, as such the total sum still owed to other creditors at balance day on the purchase of MPH and Berkeley was £3.25m.
In its directors’ report the firm said the 4% growth in group revenue from £203m to £211m reflected continuing growth in its complex PI and business legal services operations further offset by the decline in PI revenues as a result of legal reform in the area. Pre-tax profit was up 6% to £181m from £171m.
‘The directors plan to grow all areas of the business during FY16 with through a combination of further recruitment, investment in the Irwin Mitchell brand, organic growth and further M&A activities as opportunities allow,’ the accounts state.
The accounts were not impacted by Irwin Mitchell’s recent takeover of Thomas Eggar, which was announced in November 2015.