LLP conversion highlights disparity in Macfarlanes' profit figures

In the LLP accounts, profit before interest was £45.2m - a drop of 32 per cent from £66.2m a year before.

According to figures published in The Lawyer UK 200 Annual Report 2009, profit was £43.9m, a drop of 16.9 per cent from £52.8m a year earlier.

According to senior partner Charles Martin, the reason for the difference is that, having made the switch to LLP at the start of the last financial year, Macfarlanes’ results were bound by different accounting policies from previous years.

The chief difference was what is recognised as work in progress and how revenue accrued from this is treated.

Based on the firm’s previous policies, before it adopted UK GAAP, the figure published in the 2007-08 annual report, which unlike the firm’s own figures do not include salaried partners, would have been £57.1m.

The figure for profit before interest including salaried partner revenue in 2008-09 would have been £49.2m under old rules, representing a more manageable 26 per cent decline.

The turnover of the firm fell from £111.6m in 2007-08 to £99.1m last year - a fall of 11 per cent.

Macfarlanes was one of several firms to make the change to LLP in recent years, converting in May 2008.

Martin said that next year’s figures will be able to offer a genuine like-for-like comparison.