Accounts recently filed with Companies House reveal that the magic circle firm spent £55.7m on office improvements over the 2006-07 financial year, in addition to £14.8m on furniture and fittings and more than £10m on computers. The limited liability partnership (LLP) is also benefiting from a rent-free period.
The firm agreed a bank loan of £105m during the year to cover the cost of the office move and improvements but with higher than expected profits it did not draw on this. As such, interest on bank loans fell £400,000 from 2006 to now stand at £600,000.
In his report on the results, outgoing senior partner Guy Beringer said: “On the administrative side, we successfully completed our move into our new
"Due to the higher than expected turnover and another excellent performance by our debt collection teams we have not needed to utilise the loan facility arranged to cover part of the fit-out cost.”
The firm’s operating profit increased by 37% (£105m) to £393m, with turnover increasing 20% (£150m) to £887m. This came despite a £27m hike in staff costs, with the firm now shelling out £32.3m including salaries and bonuses.
The LLP itself made £244m in profits, 32% up on the previous year.
Profit for the entire firm for division among partners increased by £70m to £281.3m taking the remuneration scale for equity partners from £600,000 to £1.5m.
Partner numbers at the firm are up 6% and fee earners by 8%, although support staff only increased by 1%, partially due to the firm outsourcing much of its IT division.
The results revealed that A&O was also able to reduce its pensions deficit to £10m from £22m – partially thanks to a £6m cash injection.
Beringer added: “Like many firms with a large
"Firstly, after consulting with the members of the scheme and the pension scheme trustees, we closed the scheme to future years’ accruals. Secondly we used some of our surplus cash to inject £6m into the scheme as an additional employer contribution.”
