Pre-tax profits at Freshfields slipped last year following an accounting change related to the firm’s partner pension scheme, despite a sharp rise in revenue.
Freshfields announced in 2023 that disclosure of its trading performance 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.
Pre-tax profit for 2023 has been restated to include a positive adjustment of £280m in finance income from insurance contracts. That figure fell to £44m in 2024.
The adjustments reflect the firm’s adoption of international financial reporting standard 17, which affects the valuation and reporting of annuities that provide retirement benefits to former partners. The accounts also reveal that this adjustment increased partner profits by £81.7m in 2023, compared to previously disclosed figures.
Profit before partner annuities surged from £497.8m in 2023 to £675m.
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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