After record profitability last year Macfarlanes has reported a 9% fall in profits to £82.5m, while management pay was up, according to its latest LLP accounts.
In 2014/15 Macfarlanes recorded operating profits of £91m with top member income up to £2m. However, this year the top earning member took home £1.76m. Key management figures at the firm collectively saw an increase in take home pay from £4.3m, up from £3.9m the year before.
Turnover increased just over 1% to £161m for the financial year ending April 2016, up from £159.6m the previous year. The increase is Macfarlanes sixth year of consecutive growth.
In its financial results reported over the summer, the London firm recorded profit per equity partner (PEP) of £1.29m. The fall in PEP came after a record £1.55m in 2014/15 that was better than four of the five Magic Circle firms, with the exception of Slaughter and May.
Staff costs increased to £48m in 2015/16 from £44m the year before. The total number of support staff increased from 206 to 299, while fee earners increased to 333 from 312.
Macfarlanes has landed roles on a number of key deals this year, securing a role advising on Verizon’s $2.4bn purchase of Fleetmatics and acting for Argus Media’s chairman in its £1bn takeover by General Atlantic.
On the drop in profitability, the firm said in a statement: ‘As far as the fall in profits is concerned, we have been consistently clear that 2014/2015 was a standout year for profitability. Accounting practice requires partner remuneration to be reported according to the year in which it is allocated. Therefore the remuneration for partners within the group reflects the balance of the higher profits in 2014/15 which were not allocated in the accounts for that year but were required to be allocated in 2015/16.’
For more on Macfarlanes recent growth, see: ‘This is a gritty place’: Macfarlanes’ leaders on the hustle it takes to look effortless’