One of the UK’s biggest law firms saw profits fall marginally last year despite posting a healthy 14% rise in revenue. DLA Piper said higher salary costs and other post-Covid cost increases had caused profits at the UK LLP to dip below £200m.

In the year to 30 April 2023, revenue rose 14% to £678m, driven by increased average billing rates and fee earner headcount. But wages and salaries increased by 16.2% to £264m – mirroring the trend at other leading firms where salary increases to match inflation rises have outstripped revenue growth.

The LLP said costs were also driven up by the increase in headcount along with travel costs which were previously lowered by the pandemic. Inflation further increased the cost of running the LLP.

All of which meant that profit available for discretionary division amount members fell by 1.2% to £197.6m. The average number of members during the year rose from 277 to 292. The profit attributable to the member with the largest entitlement was £3m – up from £2.8m the previous year.

The LLP balance sheet remained strong, with a 5.6% increase in net assets to £253.6m. The UK LLP is a subsidiary of DLA Piper International LLP and has branches in the UK, Germany, Belgium and China. The practice continued to perform well in each of its regions: turnover was up 14% to £489.5m in the UK, up 12% to £156m in the rest of Europe, and up 14% to £32.4m in Asia.

The number of fee earners with the UK LLP rose from 925 in 2022 to 964 last year.