Pinsent Masons spent £20.6m on its merger with Scottish firm McGrigors in 2012 and members injected £10m before the tie up, according to accounts filed with Companies House.
The firm took in £17.1m as a direct result of the merger (19 January 2012), incurring £2.5m as a result of “reorganising, restructuring and integrating the acquisition in the period from 1 May 2012 to 30 April 2013”.
The difference between the net value of McGrigors’ assets and the amount spent resulted in a £637,000 one-off loss.
But the tie-up has boosted revenue and profits at the joined firm. Revenue is up almost 40 per cent on legacy Pinsents’ 2011/12 results, from £220.5m in 2011/12 to £306.7m in 2012/13. The combined firm generated a boosted profit of £85.8m, up from Pinsents’ £62.9m profit the previous year. McGrigors turned over £43.5m in eight months of trading in 2011/12, before the two firms’ financial calendars were brought into alignment
But due to the higher spending the firm saw a decrease in cash of £10.9m across the year and increased its overdraft by £9.3m, up from £436,000 the previous year.
Staff costs were also up at the firm with the increased number boosting salaries to £116.4m, a 43 per cent increase on last year’s £81.2m. That reflected the 50 per cent increase in fee earners, up from 809 in 2011/12 to 1,227 last year.
The tie-up saw the total number of fee earners at the firm jump from 809 in 2011/12 to 1,227 last year and Pinsents added 39 equity partners to its rank, taking the total to 141.
The number of LLP members also increased by 50 per cent, up from 230 last year to 331 currently. Non-equity partner numbers were up from 129 to 191. Distributions to those members rose by over £10m, to £77m as opposed to £64.1m the previous year.
The highest-paid partner at the firm took home £590,200, up from £531,600 the previous year.
Pinsents’ managing partner David Ryan said the accounts reflected a year of progress in the firm’s vision of becoming “truly international”, with the merger giving it the scale to make major investments. He cited the firm’s launches in Munich (26 June 2012) and Paris (31 August 2012) and growth in Shanghai (6 January 2014) as evidence of its international expansion.
“The business performed strongly during a period of immense change and continues to go from strength to strength as a result of those and other targeted investments,” Ryan added.
The tie-up between Pinsents and McGrigors was first mooted in January 2012 and took place in May that year. By November 2012 the firm had posted a 4 per cent increase in turnover for the first six months of 2012/13 compared with the same period in 2011/12. The firm’s turnover for the first half of the financial year was £146m, up from £140m (26 November 2012).