LLP accounts show health of the UK’s legal market

Financial stability is crucial for any business and law firms are no exception. A survey released last week showed that increasing profitability remains the top concern for the majority of UK firms, despite the fact that the last financial year was a record-breaker for the UK’s legal market , with revenue, profit and headcount numbers for the top 200 UK-headquartered firms all at record levels.

Nevertheless, the particular structure of the legal market, where people are the biggest asset and also the biggest expense, is clearly demonstrated with the publication of LLP accounts for UK firms. Dealing with historical staff expenses remains a key priority for a number of firms.

Nabarro, Simmons & Simmons and Stephenson Harwood, which all had good years turnover-wise in 2013/14, are among those paying large sums into final-salary schemes that pay pensions to former employees.

Nabarro is currently paying £750,000 a year into its final-salary scheme and Simmons is shelling out £200,000 a month. Stephenson Harwood’s bill hit £1.2m in 2013/14. The figures show why most firms closed their final-salary schemes to new entrants years ago.

LLP accounts also demonstrate the cost of some mergers. Penningtons Manches’ accounts report a 129 per cent increase in debt on the back of PenningtonsOctober 2013 takeover of Manches for £500,000.

Most of that was short-term debt. The firm’s longer-term borrowings fell, and while staff costs rose with the absorption of Manches’ employees, turnover was up by more – making the acquisition worthwhile.

Also on TheLawyer.com:

Featured Briefings
Employment – Totum: Beating the competition: how to promote brand to make the best hires
Tax – Addleshaw Goddard: Employee Incentives Update — December 2014 edition
Suppliers – Totum: Video: Totum talks — the new pricing paradigm
Funds – Shoosmiths: Pension schemes: Pension Protection Fund and contingent assets 2015–16
Suppliers – Totum: Video: Totum talks — the importance of business services professionals in law