BLP profits recover by 25% during 2013-14 as Lawyers On Demand sees 10% turnover growth
Berwin Leighton Paisner (BLP) shrunk its net debt by 15% during the 2013-14 financial year, with the reduction coming alongside a 25% increase in operating profit.
January 05, 2015 at 08:36 AM
4 minute read
Berwin Leighton Paisner (BLP) shrunk its net debt by 15% during the 2013-14 financial year, with the reduction coming alongside a 25% increase in operating profit.
The figures, which are contained in accounts recently filed with Companies House, show BLP reduced net debt by £5.3m to £29.2m, with the drop following a sharp rise in debt levels during 2012-13, up 134% from £14.8m to £34.6m.
The accounts also show BLP's operating profit increased by 25% from £55.2m to £69.1m during 2013-14, with profit available for distribution among members up by 27% from £52.3m to £66.2m. The firm released unaudited figures last May stating a 35% boost in profit per equity partner to £542,000.
During the first half of 2013 BLP cut 58 legal roles and 44 secretarial jobs as part of a major redundancy round. The LLP filings show overall employee headcount fell by 9% to 1,204, with the number of legal staff dipping 7% from 662 to 615 and support staff numbers falling 10.5% to 589. The number of LLP members also fell, from 179 in April 2013 to 167 the following year.
At the time BLP said it would make a 15% reduction in total salary costs as a result of the layoffs. However, the LLP accounts show salary costs decreased by 4% from £90.7m to £87.1m, with overall staff costs rising by almost 1% due to an increase in "other staff costs" from £3.9m to £9.3m.
BLP said the underlying saving in staff costs in London – excluding international offices – stood at 9%. Also, as the redundancy programme happened over the summer, only nine months of the savings are included in the statutory accounts, so full year savings would be higher.
The firm's highest paid member's earnings in 2013-14 were broadly static with the previous year at £1.2m. Members made total capital contributions of £6.8m during the year, up from £5.6m in 2013.
The accounts also show that BLP's flexible working spin-off Lawyers on Demand (LoD) issued loan stock of £2.45m to BLP in December 2013. After BLP spun off the business, the company financed the acquisition through a £2.65m loan from BLP alongside a £100,000 investment from shareholders. Last year LOD paid off £200,000 of the capital and roughly £400,000 of accrued interest.
Separate accounts filed by LOD show the business increased turnover by 10% between 22 March 2012 to the end of April 2013, from £7.9m to £8.7m, a rise attributed to an "improved mix of client base", which currently comprises corporates, financial institutions and UK law firms.
LOD's operating profit, however, dropped by 40% from £724,000 to £408,000, which was attributed to "continued investment in the business". Profit for the year after tax was £142,000, down 17% on the previous year's figure of £172,000.
LOD co-founder Simon Harper said the figures were impacted by the launches of its 'pay-as-you-go' operation LOD On Call and its transaction teams service during the year.
Harper added: "The investments made during this period are already paying dividends in the current financial year with substantial […] growth being seen. Growth this year is around 40% and the new service lines are already accounting for more than 20% of turnover."
Directors' remuneration at the business grew by 72.3% to £486,000 excluding pension contributions, while the highest paid director took home £237,000. Staff costs increased from £816,000 to £1.07m, with employee wages and salaries growing from £704,000 to £895,000.
Net debt was reduced from £2.28m to £1.48m, while cash at bank and in hand increased from £664,000 to £1.08m.
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