Herbert Smith has announced its 2011-12 financial results, posting a 3% increase in revenue against a drop in partner profits of 6%.

The UK top 10 firm has reported turnover of £480m for the year, up from £465m in 2010-11, while profits per equity partner (PEP) have fallen 6% to £840,000, down from £892,000.

The new PEP figure marks the lowest for Herbert Smith since 2006-07, when partner profits stood at £820,000. Net income has also fallen 6% this year, down to £109.7m from £117m.

Herbert Smith attributed the drop in profits to investment across its network, as well as costs associated with some areas of restructuring this year. The firm recently concluded a London redundancy consultation which will see a total of 47 members of staff leave the firm, with those departing set to receive 3.5 weeks' pay per year of service.

Herbert Smith chief operating officer David Robinson said: "The firm has performed really well in a number of areas this year, despite an extremely difficult economic landscape. Dispute resolution, finance and real estate were all strong performers; while across our international network Madrid, Tokyo and Paris have been standout offices.

"The transactional market has of course been lacklustre over the last 12 months and we have seen a dip in corporate volume activity leading us to take some difficult decisions, but we are hopeful we can now leave this behind."

The news comes as the firm gears up for the outcome of its long-running merger discussions with Australia's Freehills, with the result of a partner vote set to be announced on Thursday (28 June).