Finers Stephens Innocent is blaming accounting irregularities for its financial results this year, which have seen profits per partner slashed by 25 per cent
In 2001, the firm reported its average profits per partner as £220,000; this year they were down to £176,000. However, the firm has now admitted that its estimates of the average profits per partner figure in 2001 were "optimistic" and should in fact have been £190,000, £30,000 less than the disclosed figure. Finers managing partner Anthony Barling said the firm has altered the treatment of some assets on the balance sheet, including depreciation, which resulted in an adverse impact on profits. This, as well as overly optimistic projections on work in progress, has given the impression of plummeting income for 2002. Barling insists that it has sorted out these problems and has altered its treatment of work in progress to make the figures more realistic. "The reality is that we're now looking at different ways of calculating. We're being more rigorous. The profits per partner figure was optimistic last year," he said. However, the share of the profits that Finers partners took home tells a different story, with the top of equity rising by a massive 22 per cent on last year, from £320,000 to £390,000. The firm changed from a traditional lockstep to a merit-based system for paying equity partners in the middle of the 2000/01 financial year. The system became fully operational in 2001/02. Finers has made some good strategic progress this year. It upped its international capability significantly by joining the Meritas referral network (formerly known as CLA) in May 2002. The firm plugged the gap in Meritas, which was left open 14 months previously by former UK member Hammonds when it left to pursue its own international strategy. Finers has reported a £14m turnover for the second successive year.