Massive expenditure accounts for £6.4m loss at Law Society

The Law Society reported a £6.4m loss for 2004 last week, as the solicitors’ body published its annual accounts.

The society’s income from practising certificate fees, investments and other sources totalled £86.6m, up nearly £11m from 2003. But expenditure, as first revealed on (11 May), rose by a massive 24.5 per cent, from £74.7m to £93m, in 2004.

Expenditure accounting for the rise included a £6.3m increase in wages for Law Society staff, an extra £2.1m in legal fees and £404,000 spent on the Legal Services Complaints Commission. Depreciation in equipment, furniture and hardware accounted for a further £6.4m, up from £2m in 2003.

Office holder, council and committee expenses combined to cost the society £1.6m, up slightly from £1.5m in 2003.

The accounts also reveal the salaries of the society’s office holders and chief executive. The Law Society president’s salary went up by £4,680 between 2003 and 2004 to £89,284. But the highest paid member of the society’s senior management team is chief executive Janet Paraskeva, who was paid a total of £297,000 in 2004, including a £28,000 bonus and £72,000 in pensions contributions.

The shortfall in the society’s pension scheme has increased from £29m at the end of 2003 to £32.5m, based on the existing investment strategy adopted by the Law Society trustees. According to a report produced for the 11 May council meeting, the increase is “primarily due to a fall in gilt yields, which are used to place a value on the scheme’s liabilities”.