SNR Denton saw profit before tax shrink by around 40% last year across its operations outside the US, with the firm's latest limited liability partnership (LLP) accounts showing a fall in profit from £37.9m to £22.5m.

The transatlantic firm's UK LLP accounts, which cover operations across the UK, Europe, the Middle East and Asia, show profit available for discretionary division fell from £6.2m to £615,000, against a slump in audited turnover from £166m to £152.5m.

The figures compare with a preliminary turnover figure of £154m announced by the firm last year, against profit per equity partner (PEP) of £232,000.

According to the LLP accounts, staff costs dropped from £86m to £82.8m on the back of a reduction in headcount that saw fee earner numbers shrink from 514 to 480, while support staff numbers reduced from 614 to 577.

The average number of members in the partnership during 2010-11 stood at 126 compared with 138 the previous year, with the highest-paid member taking home £755,000, compared with £737,000 in 2009-10.

The accounts also state SNR Denton's UK LLP received £1.14m in turnover from its Turkish practice, which is started restructuring in September 2010. The restructuring saw the firm hand over the operation, which employed 19 fee earners, to existing local law partner Ece Gurner Law, with Istanbul becoming an associate office.

Other details contained within the accounts include a new £2.3m loan, which took total bank loans and overdrafts to £22.8m, up from £18.6m the previous year, set against a cash balance of £6.1m.

A spokesperson for SNR Denton said: "The LLP accounts profit for the year ended 30 April 2011 is £3m lower than the distribution accounts [used for calculating PEP] due to the UK GAAP requirement for the LLP accounts to mark future losses on surplus premises to market. This requires a provision to be made for future losses on these properties. Slow real estate market conditions have made subletting a challenge.

"The distribution accounts charges to profit only the costs incurred on surplus properties in the year. This approach ensures there is an even spread of costs so that partners in any one year do not bear an excessive cost. It is the distribution accounts profit that is distributed to partners and therefore the correct profit to calculate PEP and profit movement."

The transatlantic firm, formed by the 2010 merger of Sonnenschein Nath & Rosenthal and Denton Wilde Sapte, recently posted revenue growth of 4.4% and 7% PEP growth for its US business during 2011.

US partner profits now stand at $880,000 (£556,000). In comparison, the firm's UK arm reported PEP of £232,000 for 2010-11.

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