Allen & Overy (A&O) has set aside £3m for City redundancy payouts as it overhauls its back office team in light of its new 'onshoring' arm in Belfast.

The total cost towards the Northern Ireland support centre was £4m in the 2010-11 financial year, according to the magic circle firm's annual report, of which £3m will be spent on redundancy payouts. However, the firm will be able to claim back the majority of that cost through a £2.5m grant it will receive from Invest Northern Ireland for creating local jobs.

One hundred and fifty-five London business support jobs are at risk due to the launch in Belfast this autumn. The report states that the Belfast operation will save £11m in its first five years of operation and £8m annually after that.

The news comes as part of A&O's financial report for 2010-11, which is issued with its annual review, which also highlighted a number of other costs and a decline in profits available to be paid out.

Although the firm reported average profits per equity partner had remained stable at £1.1m for last year, the firm's profits available for distribution among members was down by 9%, from £328.6m the previous year to £298m in 2010-11.

Meanwhile, total costs at the firm, which has sustained sizeable international investment over the last 18 months, increased by 6% to £675m, while one-off costs reached £29m, including £24.6m for relocating 200 staff from its Canary Wharf outpost earlier this year. However, the property cost is included for accounting reasons as it will be spread over partner distributions throughout the length of the lease.

The firm's annual review also highlighted a decline in the amount of hours spent on pro bono work by the firm's lawyers from 57,300 hours in 2009-10 to 41,718, while the total percentage of lawyers who recorded time on pro bono work fell from 45% to 30%. If measured in billable time, the total value of the pro bono hours fell from £18.39m to £14.31m.

The report also includes details of the City giant's ethnic and gender mix at various levels. The gender split saw a minor decrease in the proportion of women partners, falling 1% to 15%, while the proportion of female associates remained at 45%. Fifty-six percent of the firm's trainees are currently female, up from 54% the previous year, while women continue to dominate support staff roles, counting for 73%, compared to 72% last year.

The report shows that 6% of the firm's partners are designated as part of an ethnic minority, though 5% were unclassified. Seventeen percent of associates are classed as ethnic minorities, rising to 22% for trainees.

Total staff costs rose to £417m from £383.9m on the back of the firm's expansion, which included office openings in Australia and Qatar. The firm reported a turnover rise of 7% for the financial year to £1.12bn, while the average number of equity partners grew by 12%, including 34 lateral hires.

The firm's senior management, David Morley and Wim Dejonghe, strike a confident tone in an interview introducing the annual review. Morley comments: "I'm very bullish about the future of the firm. We occupy a position very few of our competitors enjoy, particularly with the growing trend towards globalisation and the fact that businesses are increasingly working across borders. I see growing demand for top-tier legal advice."