Final Olswang accounts pre-merger reveal profit plummeted by 77%

Olswang’s operating profit plummeted by 77% in the final financial year before its tripartite merger with Nabarro and CMS Cameron Mckenna.

The firm’s operating profit dropped from £35m to £8m during the year ended 30 April 2017, the firm’s liability partnership (LLP) accounts have shown.

CMS managing partner Stephen Millar said the figure was “hugely” impacted by onerous lease charges that had to be charged to the profit and losses of that year under statutory accounting rules. He also added that redundancy costs at the firm had contributed to the steep drop in profit.

Meanwhile, the firm’s turnover fell by 14% from £112m to £96m during the year.

The accounts also reveal that the average monthly total of LLP members dropped from 99 to 75 during the period.

Almost a third of Olswang’s partnership left the firm in the financial year before its merger with CMS and Nabarro, Companies House records have shown.

In total, 28 partners departed between 1 May 2016 and 30 April 2017, equating to 28% of the firm’s total partnership, based on its 2015-16 partner count of 101.

Despite the fall in profits, management pay during the financial year increased by more than 20%. Key members took home £6.5m, compared to £5.4m the year previously.

However, the firm’s highest paid member saw a slight fall in pay, from £759,000 to £727,000.

Nabarro’s accounts for the 2016-17 financial year have also been released, revealing that the firm’s pension deficit increased by more than 40% last year, from £12.2m to £17.2m.

The increase comes despite the firm reducing the deficit by more than 50% in 2015-16 from £31.9m to £12.2m.

It paid £4.4m into the scheme in a bid to clear the deficit more quickly than a 19-year recovery plan agreed in 2014, which was meant to see the firm pay in £1.25m each year between 2015-16 and 2018-19.

Millar would not confirm whether the plan to deal with the deficit had changed post-merger, but said the combined firm is “confident” about the arrangement in place.

The accounts also reveal Nabarro’s cash position was slashed by more than 50%, from £22.6m to £10.4m.

Meanwhile, the total pay taken home by Nabarro’s key management fell from £8m to £5.5m during the year, while its highest-paid member took home £1m during the year, an increase of 6% from £944,000 the previous year.

The firm restructured its management during the financial year, with several members leaving the group.

It reported a slight uplift in fee income in the last financial year, from £129m to £131m, while its profit dropped by 10%, from £46.6m to £41.8m.

Total staff costs at the firm increased slightly, from £46.9m to £50.2m, while its average number of staff fell from 713 to 683.

Meanwhile CMS Cameron Mckenna also filed its final set of LLP accounts pre-merger, revealing its turnover increased by 4% during the last financial year from £263m to £273m.

The firm’s operating profit fell slightly from £74m to £71m.

Its highest paid member took home £798,000 compared to £860,000 the year previously, while total management pay remained flat at £2.7m.

The combined firm also released a total turnover figure for the year ended 30 April 2017 of £504m and operating profit of £122m.

Millar said: “The business is performing extremely strongly this year. Every day we gain work as a result of the much bigger platform and bigger spread of client services we can now offer. We’re extremely confident.”

The merger between the three firms went live on 1 May 2017.