LLP accounts show Addleshaw Goddard’s top earner took a 30% pay cut as both profit and income fell in a year when Brexit affected transaction levels in the first half before a recovery after September.
However, the firm insists it is performing well and growing on an underlying basis, both domestically and internationally, as it invests in new teams and infrastructure and looks to pick up on an encouraging start to this year.
The firm’s LLP accounts to 30 April 2017 revealed its highest-paid partner received £776,160, down from £1.21m the year before. This as turnover fell 4% to $188.2m, and operating profit dropped 14% to £64m.
In a statement, Addleshaws said its fee income for the period was in fact £10m higher at £198m, a difference a spokesperson attributed to associated entities, such as international offices, which sit outside of the group and are not consolidated with the UK numbers.
The spokesperson added that on an underlying basis, Addleshaws’ income grew 2%, because last year’s figure included ‘an element of uplift due to non-recurring success fee income’. This is understood to relate to a settlement involving the late Boris Berezovsky , a case relating to previous years and worth about £5m-10m.
Profit available for distribution among partners fell to £25.7m, from £38.3m, while the average number of partners increased by five to 171. Again, the firm said that on an underlying basis, profit per point grew by 4%. The firm said that this figure took out the aforementioned one-off income gain, and that new clients, more profitable work, and ‘careful financial management’ delivered the uplift.
Addleshaws closed the year with £21.9m in cash, down from its strongest-ever cash position of £25.7m last year, but that had come on the back of an increase in over £20m that year.
The average number of employees, excluding partners, rose 43 to 1202, as staff costs rose to £69.7m from £64.6m. Addleshaws has added new offices in Scotland through its combination with HBJ Gateley but as this occurred in June last year, the accounts have not incorporated that merger.
Key management personnel, including managing partner John Joyce, members of the executive committee and directors of AG services, received £3.1m, the same as last year.
Joyce commented: ‘We are very pleased to have grown both our domestic and global turnover while improving our underlying profitability, particularly when you factor in the material investments we have made in teams and infrastructure and the effect on our transactional teams of UK trading conditions in the summer period post the referendum.’