Freshfields Bruckhaus Deringer’s management board and global practice heads took home a combined £18.1m in 2015/16, up £1.3m on the year previously.
The magic circle firm’s LLP accounts, released today (3 February), also demonstrate total revenue for the year was £1.285m, up slightly on £1.279m in 2014/15.
Revenues were around £40m lower than expected from the firm’s unaudited results released last summer, which the firm attributed to currency fluctuations related to how it reports its LLP accounts.
Net profit was down 24 per cent to £389.2m, while profit available for discretionary division among members dropped almost 25 per cent to £361.7m.
Profits attributable to the LLP (Freshfields’ operations outside of the US, Hong Kong and Singapore) also dropped 25 per cent to £357.1m.
A spokesperson for the firm said the drop in all profit figures was in part due to a “significantly higher charge in relation to the liability for partner pensions”, up from £25m to £138.6m in 2015/16.
Profit before partner annuities dropped by £5m from £505.3m to £500.3m.
At the same time staff costs were up 4 per cent to £584.5m despite a slight decrease in the number of secretarial staff to 2,111. Earlier this year Freshfields launched a review of 180 personal assistant roles, with many offered executive assistant roles.
The average number of members dropped by 10 last year to 324 partners, while the average number of fee-earners was down 5 per cent from 2,640 to 2,511.
Real estate obligations also increased in 2015/16, with total obligations under operating leases up from £5.2m to £6.4m. This was impacted by Freshfields taking out a permanent lease for around £2.6m in Manchester’s One New Bailey, where its legal services and back office hub is headquartered.
As a result of shifting approximately 300 roles to Manchester Freshfields will downsize in London when its Fleet Street lease expires in 2021. It is understood to be leasing a space in 100 Bishopsgate for its new City headquarters.
The firm’s provision for current and retired partners’ pensions climbed above the £1bn mark last year, to £1.084bn. The increase was due to an increase in the provision for already-retired partners, from £509.4m to £619m.
Freshfields remains in a strong cash position. It recorded £96m net cash as of the end of 2015/16, compared to £85m the year before.
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