Nabarro has more than halved its pension deficit from almost £31.9m to £12.2m, according to its latest LLP filing for the year ending April 2016.
The firm has set up a pension recovery scheme aiming to eliminate the deficit within 19 years. According to the accounts, the firm has planned to pay £1.25m per year from 2015/16 to 2018/19. However, the firm also injected £4.4m last year to cut the deficit more quickly, and said it anticipated to pay £5.25m for the financial year to April 2017.
The slashed pension liability comes as Nabarro gears up for a triple merger with CMS Cameron McKenna and Olswang, first reported in September.
Concerns over Nabarro’s pension arrangements for partners had previously hampered merger talks. Its previous LLP filing showed the pension deficit had increased from £24m to £32m from 2014 to 2015.
The firm’s top earning member took home £944,000 in 2016, down slightly from £966,000 the previous year. The figures in the LLP accounts do not necessarily equate to the highest paid equity member and can relate to ‘golden handshakes’ to retiring members. Key management personnel earned a total of £8m for the year, up from £7.6m in 2015.
Nabarro senior partner Ciaran Carvalho (pictured) said: ‘Despite living in a post-Brexit world, we are optimistic about results for the first half of 2016/17 too. While there is much to be done and much uncertainty at large following recent political events, we are confident that the firm will be well positioned to enter our merger with CMS and Olswang on 1 May in a position of strength.’
The firm is currently in the middle of merger talks with Camerons and Olswang. While the pension deficit is understood to have hampered previous merger discussions with Addleshaw Goddard in 2013, Carvalho said in October the trio had come to an agreement on the pension scheme.
If the merger goes ahead next year the three will create a combined firm with revenues of around £450m, rising to £950m counting CMS’s wider network of European firms.
The three firms are also looking at ways to consolidate their three London headquarters and European offices. Nabarro only moved into its new premises at London Wall in 2014, while Camerons occupies new offices at Cannon Place. A spokesperson has previously stated the firms have ‘no plans for fee-earner redundancies as part of the merger, nor do we envisage any office closures’.
According to the accounts, the number of lawyers at Nabarro increased to 393 fee earners from 362. The number of administration staff was 320 for the year, with staff costs at £47m, up around 3% on 2015. The firm’s turnover increased to £130.4m for the 2015/16 financial year.
Earlier this month, Legal Business revealed the head of Nabarro’s Manchester office Mark Haywood is currently involved in arbitration proceedings with his previous firm Addleshaws, which he quit in 2014 to join Nabarro. The firm is understood to have agreed to cover the costs of the dispute, valued at around £5m.