Magic circle firm Freshfields has stated that it will face short-term pressures in its efforts to continue revenue and profit growth.

The firm revealed that profits before tax and partner annuities for the year ending April 2014 were £527.6m. This was an increase of 7% on 2012/13, when profits were £491m.

Revenue also continued to grow in 2013/14, from £1.23bn to £1.28, according to accounts filed with Companies House this week. The firm has already reported that profit per equity partner rose 7% in 2013/14.

The firm’s report to members said 2013/14 was a successful year which reflected greater stability in many key markets.

But there was a note of caution on current economic conditions which it said may mean demand for services is ‘impacted’ in the short term.

The accounting report adds: ‘Liquidity pressure on both our clients and suppliers could also have an adverse impact on the business.’

The firm said it has ‘considerable’ financial resources to ensure these issues are dealt with, along with a diverse range of clients and suppliers across different geographic locations and sectors. The firm had £42.9m of cash at 30 April 2014, compared with £55m a year before.

Headcount overall rose from 4,561 to 4,621 in 2014, largely due to an extra 59 fee-earners.

Salary costs reflected this change, rising from £449m to £466m, although the profit and remuneration of the highest-paid member fell from £2.5m to £1.9m (the higher figure took account of retirement payments).

The growing profits at Freshfields reflect a largely positive trend among top City firms.

Linklaters reported a profit increase of 6.5% to £395m in 2013/14, while fellow magic circle firm Allen & Overy’s profits rose 7% to £532m.