Members of a leading trade union firm waived their right to a share of £1.6m in favour of putting money back into the business, accounts have revealed.
The annual report for Thompsons Solicitors LLP for the year ended 30 April 2021 show that in September last year the board resolved that the money would not be distributed to the 22 eligible members and instead be permanently retained in the LLP.
During the year, in response to the Covid-19 pandemic, the employment and personal injury specialist agreed a reduction in staff hours and pay and collectively agreed with the staff union not to apply incremental pay rises. The savings from this amounted to £1.6m, which was distributable to members but not taken. They will share the remaining £1.3m profits for the year, which is around 12% down on the previous year.
A spokesperson for the firm said the pandemic has been ‘challenging’ and led to a fall in case intake which had immediate and long term consequences.
‘Recognising this and the impact on staff, the partnership made the decision that over half of our profit should not be distributed but retained as a permanent asset for the benefit of the whole firm and also enabling us to take advantage of opportunities for growth as things open up again.’
Overall, profit for the year before tax reserves, members’ remuneration and profit shares was up 25% to almost £9.5m. This was despite turnover falling from £58.6m to £54.7m.
The report states that the firm has reviewed its property footprint following a new agile working policy and reduced its office space by more than 4,000 sq ft.
During the pandemic, the firm took advantage of the coronavirus job retention scheme (receiving grants of £1.5m in 2021), HMRC deferral on partner tax and VAT payment holiday to alleviate the pressure on cash flow. The firm’s final furlough claim was in July 2021 once the recommendation to work from home had been lifted.
Staff numbers remained relatively stable at 827, with the number of employees listed as executives increasing slightly to 458. The highest remuneration for a member was £590,000 (compared with £404,000 the previous year), which included a net income of £305,000.
Following the year end, the firm repaid bank loans of £7.2m and entered into new financing arrangements for £6.1m.