While top 20 LB100 firms Bird & Bird and Clyde & Co both boosted their operating profit in the 2016/17 financial year, LLP accounts show that Bird & Bird also saw its debt grow while Clyde & Co’s rising partner numbers contributed to management and highest-paid member numbers barely increasing.
Bird & Bird’s LLP accounts showed pre-tax profit rose 9% to €103.5m in the year to April 2017 and the highest-paid member brought home €1.08m, up from last year’s €962,000. Turnover was also up 5% to €360.7m.
However the firm also saw net debt soar 24% to €49.3m. However, the firm’s chief financial officer Richard Olver told Legal Business the debt had been reduced to €30m as of 31 October last year.
He added that the increase in debt in 2016/17 was partly due to the figure being ‘slightly understated the previous year due to the financial arrangement for our new London base’, and partly the increased level of business and ‘clients paying more slowly’.
Bird & Bird moved to new premises at 12 Fetter Lane in September 2016. Last year the cost of the new building, equipment and computers was reported at €17m and the firm’s accounts showed debt tumbling 15% to €39.5m.
Olver added that the firm had since April 2017 implemented a ‘concerted effort’ to secure payments from debtors and asked partners to contribute more quickly without increasing the amount of capital required from them.
Bird & Bird has also unveiled its half-year financial results for the 2017/18 financial year, showing turnover rose 6% against the same period last year to €177m. On a like-for-like basis, the increase was 9%, the firm said.
‘The growth has been quite widespread across the areas we are focused on – the core sectors which are changed by technology,’ said chief executive David Kerr. Profit before tax was also up 7% to €52m in the first half of the financial year.
Meanwhile, insurance heavyweight Clyde & Co also filed its LLP accounts this week, recording a 14% uptick in turnover from £447m to £511m. The firm’s operating profit also saw a boost, rising from £117.4m to £124.8m.
Clyde’s highest-paid member took home slightly less than last year however, pocketing £1.37m instead of 2016’s £1.39m. The relatively static figure is explained by a healthy 16% upturn in the number of partners at the firm, which rose from 262 in 2016 to 305 in 2017.
The firm’s key management personnel, described in the accounts as ‘all designated members and a number of senior members and senior managers’ also took home less than last year. In 2016, £12.5m was distributed to the group, compared to £12.4m this time round.
The accounts show that Clyde took out over £76m in new bank loans in 2017, a significant increase on 2016 when the firm took out £10m. But despite the rising bank debt, Clyde’s cash position is more secure, with cash at bank and in hand growing from £18.2m to £28.3m. Clyde has also paid back £30m of the debt, meaning £36m of the loan is outstanding.
An increase in staff costs reflected an increase in headcount for Clyde, with the global number of fee-earners rising from 1,699 to 1,780 and the number of support staff growing from 1,324 to 1,494. Overall, staff costs went up 18% to £237.4m.