The Law Society’s annual deficit rose again last year to nearly £8m, its recently published accounts reveal.
The society’s income from practising certificate fees, investments and other sources totalled £110m in 2005, up from £103m in 2004. But expenditure rose by a greater amount to £118m from £108.6m the previous year.
However, the society’s acquisition of the Solicitors Indemnity Fund (SIF) meant that £30m was added to the income side of the balance sheet, enabling the organisation to end the year in credit.
The main cause of the society’s increase in expenditure was a £6.7m, or 16 per cent, rise in wages and salaries, up to £47.3m. In the same period, the average number of Law Society employees rose by 6 per cent to 1,364.
Compensation for the society’s office holders went up, with the salary for the president rising to £91,668 from 2004’s £89,284. Annual compensation for the president, vice-president and deputy vice-president has gone up again. Since 1 September 2005, the president’s annual compensation is now £93,483.
As in 2004, the Law Society’s highest earner was chief executive Janet Paraskeva. She was paid a total of £338,000 in 2005, including a salary of £196,000, a bonus of £38,000 and £94,000 in pensions contributions.
Depreciation in equipment, furniture and computer hardware cost the society £10m in 2005, compared with £6.4m in 2004. Another substantial increase in expenditure came from the Legal Services Complaints Commission, which was only established in 2004. Last year the Law Society spent £1.4m on commission-related activities.
Legal fees for cases and interventions brought by the Law Society, as well as other advice, rose to £8.8m in 2005 from 2004’s £6.9m.
The bulk of the rise in income came from the increase in practising certificate fees, which totalled £82.2m in 2005 compared with £78.4m in 2004. Income from other sources dropped slightly.
Good news came from the Law Society’s pension scheme. After payments from the SIF into the scheme, the deficit dropped from £44.8m in 2004 to £36.3m in 2005.
The accounts were approved by the Law Society’s Audit Committee last month. A Law Society spokesperson said that although the accounts show a deficit, an increase in the practising certificate fee in November meant there was a budget surplus of £6m.