CMS accounts reveal financial details of Integreon outsourcing deal
CMS Cameron McKenna's 2010-11 limited liability partnership (LLP) accounts have revealed financial details of the City firm's controversial back-office outsourcing arrangement with Integreon, which went live in April last year. The accounts show Integreon is due to make an £8.7m payment to Camerons for taking on the service company housing virtually the whole of the law firm's back office support function last spring.
January 24, 2012 at 10:18 AM
3 minute read
CMS Cameron McKenna's 2010-11 limited liability partnership (LLP) accounts have revealed financial details of the City firm's controversial back-office outsourcing arrangement with Integreon, which went live in April last year.
The accounts show Integreon is due to make an £8.7m payment to the UK law firm for taking on the service company housing virtually the whole of the law firm's back office support function last spring.
CMS Cameron McKenna will in turn pay Integreon £8.3m over a number of years to provide the services – which include IT and HR – back to the firm for 10 years.
A spokesperson said: "£8.7m is not the sale price. £8.7m is an amount receivable from Integreon over a number of years. There is also a figure of £8.3m which is an amount payable to Integreon over a number of years. There are long-term financial commitments on both sides and these figures are a part of this."
The LLP accounts also show that the firm's highest-paid member made £1.14m last year, including a £640,000 early retirement provision.
The figure is more than double the equivalent figure in 2009-10, when remuneration for the highest-paid member stood at £567,000.
Profits attributable to CMS Cameron McKenna LLP – which includes only the UK partnership and not profits made overseas – fell from £46.7m to £28.3m during the year. Group operating profit increased marginally to £53.7m, with profit for the year for the consolidated group before members' remuneration standing at £49.6m, up from £47.8m in 2010.
The firm's share of turnover from its Russian tax and legal joint venture with CMS Bureau Francis Lefebvre and CMS Hasche Sigle, which was formed in 2008, increased from £7.97m in 2009-10 to £9.2m last year, while CMS Cameron McKenna's share of the loss decreased from £3.48m to £1.68m.
Net cash flow from operating activities was down from £59.4m to £43.8m, while current assets due from debtors increased by £33.6m from £79.7m to £113.3m. This includes the £8.7m due from Integreon after more than one year, with the increase also reflecting slower collections in some areas of the business, as well as the overall rise in income.
Staff costs, including salaries, social security and pensions, stood at £76.6m, compared with £77.3m in 2010. Total staff numbers increased marginally from 1,380 to 1,403.
The deal with Integreon, which excluded marketing and communications and a handful of senior finance and IT managers, was expected to see 33 of the UK firm's 200-strong London support staff losing their jobs, with a further 76 given the option to relocate to Bristol or India.
The accounts also show that the firm invested 9,900 hours of working time on corporate social responsibility (CSR) projects, working with charities including A4ID and LawWorks as well as local community organisations in East London to a total value of £1.4m. This was up from 9,200 hours in 2009-10 at a value of around £1.1m. The firm also donated £191,000 to charity.
The firm reported a 4.9% increase in turnover to £225m for 2010-11, with PEP climbing by 11% to £500,200.
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