Freshfields’ profits to highest-paid partner jumps to £3.2m as salaries drop

Freshfields Bruckhaus Deringer’s highest-paid partner received £3.2m last year, up 68 per cent from £1.9m in 2013/14, LLP accounts revealed.

In a note to the accounts the firm said that the amount included profit and remuneration and payments in relation to the partner’s retirement from the firm.

At the same time the firm’s salary costs in 2014/15 dropped by 1.2 per cent, from £466.1m to £460.6m. Total staff costs rose by 2.7 per cent from £547.7m to £562.7m as pension costs and “other staff costs” increased.

Despite salary costs dropping, Freshfields’ total staff headcount rose by 3 per cent, from 4,621 people in 2013/14 to 4,759 last year.

The firm’s provision for current and retired partners’ pensions fell below the £1bn mark last year, to £989.4m as at 30 April 2015. The decrease was due to a drop in the provision for already-retired partners, from £535.4m to £509.4m, although the provision for current partners rose £10m to £380m.

The LLP accounts confirmed a slight rise in Freshfields’ audited turnover for 2014/15. Revenue rose by just 0.1 per cent, from £1.278bn in 2013/14 to £1.279bn last year. Net profit for the LLP increased by 0.4 per cent, from £509.7m in 2013/14 to £511.8m.

However the profit available for discretionary distribution to members dropped by 13 per cent from £552.1m to £481.3m after the movement in the provision for current partners’ annuities. Of that, £25m is payable from future profits, leaving Freshfields’ profit for the year before annuities at £506.3m.

Freshfields remains in a strong cash position. It recorded a £42.1m positive movement in funds last year, leaving it with £85.3m cash in the bank at year-end – almost double its funds of £42.9m at the end of the previous year.

The accounts noted the firm had capital commitments of £12.8m at 30 April last year payable over five years, a change from the previous year when there were no capital commitments.