Addleshaw Goddard earlier this year asked partners to return some profits handed out ahead of schedule in order to pay a tax bill, it has emerged.

The top 20 law firm requested that equity partners pay back some profits that had been distributed in late 2008. In October last year the firm paid out all equity partners' quarterly profit distributions from the 2007-08 financial year – amounting to £12m in total – even though they were not due to be paid until November 2008 and February 2009. The unusual move, which occurred in the aftermath of the collapse of Lehman Brothers, was a response to fears that it may not have been safe to leave the money in the bank.

But it has now emerged that half of the distribution originally due for February was recalled by the firm in January to help Addleshaws pay an impending tax bill. The firm, however, then generated enough cash in order to repay the money to partners in February.

The move demonstrates the kind of unusual steps law firms are taking to manage their cash amid the recession and credit squeeze. However, Addleshaws is expected to revert to its traditional practice of paying out quarterly profits distributions to partners in May, August, November and February.

It is also understood that the firm does not expect to request any more profits be repaid to meet its upcoming tax obligations.