Clifford Chance's pension deficit hit £16.4m in last financial year

The magic circle firm’s LLP accounts show that the actuarial loss on the scheme went from £11.2m in the financial year ending April 2008, to £16.4m last year.

The scheme promises employees a pension amounting to a fixed percentage of their final salary for every year worked. It is currently closed to new entrants, although the firm does also operate a defined contribution scheme.

A Clifford Chance spokesperson said: “Like most other businesses we’ve seen the value of our defined benefit pension fund decline in line with the downturn in the financial markets. Like many of those companies, we’re working to address the gap.”

The accounts further show that the firm paid out more than £59m in restructuring costs during the 2008-09 financial year, of which around £53m was spent on costs incurred by partnership redundancies.

Undistributed earnings classified as equity fell from £234m to £12m in the latest figures, as total equity also dropped from £450m to £383m.

The accounts further confirm details of November 2008’s cash call, which saw partners contribute £60.7m to the Clifford Chance coffers, as reported by The Lawyer in January last year (9 January 2009).

Overall in 2008-09, the firm’s revenue fell by 5 per cent to £1.26bn, while average profit per equity partner (PEP) suffered a 36.6 per cent fall, from £1.17m to £733,000.

As reported during last year’s financial reporting season, the firm benefited from exchange rate fluctuations. The LLP accounts reveal that the firm’s foreign exchange reserve capital grew by £46.6m, against a profit of £24.2m from foreign exchanges in 2007-08.

A £457,000 profit was made from the sale of resources, such as IT equipment.