The Law Society has reported a budget surplus of £56.9m for the 2010 financial year.

The Society's annual report, published today (15 June), attributed the surplus to four factors, including higher than expected collections from the first year of its 'Fairer Fees' scheme, which saw the organisation introduce a firm-based practising certificate (PC) fee in addition to the individual fee.

The body also spent £15m less than budgeted on costs, saved £10m through a revaluation of its pension scheme, and saved £16.5m before tax by exercising a profit share agreement connected with the closure of the Solicitors Indemnity Fund in 2000.

The additional receipts from the 'Fairer Fees' scheme have been ringfenced and will be set against funding for 2011.

Law Society chief executive Desmond Hudson said news of the surplus came as the organisation planned to reduce its cost to the profession, including a target to remove the "burden and risk" of its final salary pension scheme.

The body is currently in advanced talks with the trustees of the scheme that, if agreed, could result in the closure to future accruals and it being wound up. Hudson said this would require a significant one-off payment in 2011 but that the cost of that can in part be met because of the 2010 surplus.

Hudson said: "The new turnover-based element of practising fees for firms introduced in 2010-11 delivered a slightly higher value of receipts than had been assumed in the original fee calculation. This surplus was set aside to offset next year's funding requirement. This surplus is set against the backdrop of our ongoing intention to reduce the cost of the Law Society in the coming years."

The news comes as the Law Society Council is set to vote on the new PC fee level at a meeting on 13 July. The Solicitors Regulation Authority (SRA) has recommended that it be cut by 18% from £428 to £350. The SRA has also budgeted for a similar-sized cut in collections from the firm-based fee during 2011-12 from £121.7m to £99m.