Pre-tax profits at Freshfields slipped last year, despite a sharp rise in revenue. However, an accounting adjustment reflecting the cost of benefits provided to retired partners boosted the balance sheet substantially.
Freshfields announced in 2023 that disclosure would in future be limited to mandatory accounts filed months after the year end.
These show that for the year ended 30 April 2024, the firm posted profit before tax of £668.9m, down from £726.3m the previous year. Revenue climbed 18% to £2.12bn.
Profit before partner annuities, however, surged from £497.8m to £675m. Partner annuities provide retirement benefits to former partners, feeding into succession planning and ensuring younger partners can afford to underwrite them.
The adjustment reflects the firm’s adoption of international financial reporting standard (IFRS) 17, which affects how annuities should be measured, recognised and reported. The accounts also reveal that this adjustment increased partner profits by £81.7m in 2023, compared to previous’y disclosed figures.
In 2024 Freshfields’ ‘key management personnel’, comprising the senior partner, managing partners and heads of the global practice groups, shared remuneration of £26.2m, up from £21.8m the previous year.
The firm’s employee wage bill climbed 15% year on year to £1.1bn (2023 £955m).
Freshfields Bruckhaus Deringer, as it then was, announced in July 2023 that it would no longer be releasing details of its trading performance to the media. The firm said it considered ’the real sign of the firm’s progress to be based on the quality of business we’ve built and the client mandates we’re winning around the globe’.
In 2023-24 revenues climbed in all but one of the firm’s four geographical markets. European income climbed 20% to £1,561m (£1,306m), and in the US to £391m (£311m). Middle East and North Africa also posted a rise, from £34m to £42m, but revenues in Asia fell from £142m in 2023 to £127m.
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