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LLP accounts: Freshfields management team takes home £19.1m amid overall profit uptick

The management team at Freshfields Bruckhaus Deringer took home £19.1m for the 2016/17 financial year, according to latest LLP accounts filed with Companies House.

This combined remuneration for the Magic Circle firm’s senior partner, managing partners and heads of global practice groups is a 6% increase on the previous year’s £18.1m package.

For this accounting period, the management team includes senior partner Edward Braham, managing partner Stephan Eilers and former co-managing partner Chris Pugh, who officially stepped down from the role in August 2017. Freshfields’ LLP accounts do not divulge figures for the highest-paid member.

Total revenue for the year ending 30 April 2017 was £1.34bn, a 4.7% increase on last year’s £1.28bn, while operating profit saw a 6% increase to £416.7m from £392.3m the prior year.

The figure is a significant improvement on the 2015/16 financial year when Freshfields operating profit fell drastically by 24% to £392.3m from £514.2m, affected by a sharp increase in the firm’s pension provision. Freshfields had £76m of net cash compared with £96m the previous year.

This time last year, Freshfields’ Companies House filings stated turnover as £40m lower than its previously reported revenue figures for 2015/16, with the firm claiming exchange rates as the reason for the discrepancy. The firm posted a 0.5% revenue lift for the 2015/16 financial year, after it claimed a 7% turnover boost for the same period when it unveiled results last year.

The latest accounts show staff costs increased 10% from £584.5m to £642.5m, while overall staff numbers fell 2% from 4,622 to 4,543. The number of fee-earning staff fell by 4% to 2,420 from 2,511 the previous year, while there was a slight increase in the number of secretarial and support staff at 2,123, compared with 2,111 the previous year.

Clifford Chance (CC) and Allen & Overy (A&O) are the other Magic Circle firms to have published their LLP accounts so far.

CC’s 13-strong executive leadership team took home £16m for the 2016/17 financial year, up 7% on the previous year. The rise reflected only a slight per head increase on last year’s figure, where the 12-person executive received £15m.

CC’s overall revenue for the year was up 11% to £1.54bn from £1.39bn. However as the firm stated in its filing: ‘Excluding the effect of exchange rates, revenue growth compared to last year was 2%.’

Meanwhile A&O’s management team saw a collective remuneration hike of 16% to £15.8m compared with £13.6m the previous year. The firm recorded a £48.2m boost attributed to swings in the value of sterling, putting average profit per full partner at £1.51m, an increase of more than 25% on 2016’s PEP of £1.2m. Without the forex gains, PEP would have been £1.4m.