K&L Gates UK paid out more than its profit in 2012
K&L Gates UK limited liability partnership (LLP) paid out more in in remuneration in 2012 than it made in profit, accounts published on Company's House reveal. The UK partnership made payments to members to the tune of £5.36m in remuneration and profit shares, despite profits before taxation standing at £3.61m for 2012.
October 07, 2013 at 09:46 AM
2 minute read
K&L Gates UK limited liability partnership (LLP) paid out more in remuneration in 2012 than it made in profit, accounts published at Company's House reveal.
The UK partnership made payments to members to the tune of £5.36m in remuneration and profit shares, despite profits before taxation standing at £3.61m for 2012.
This resulted in a £1.75m loss for the 2012 financial year.
In 2011, the LLP also posted a loss for the financial year of £2.7m, after members were paid £4.7m, despite profit before remuneration and profit shares sitting at £2m.
One senior tax specialist said the figures were "clearly not sustainable…it essentially means they have paid out to partners more than they have earned".
A note in the accounts says financial statements were prepared on a going concern basis and "pre-determined fixed amounts paid to members during the year and other guaranteed amounts are treated as a charge against profits".
The filings also reveal the UK LLP passed on a £2.7m loss to the firm's Delaware LLP in 2012. At 31 December 2012, the firm owed the Delaware LLP £9.96m as a result of inter-firm transactions, down £4.33m from £14.3m at the beginning of 2012.
The UK LLP's turnover increased 7% in 2012 to £39.2m – with additional income remaining static at £2m.
Staff costs increased 1% to £14.4m, though professional and administrative and support staff numbers fell from 214 to 202.
The average number of members also increased by 15% to 75 year-on-year. The accounts show the largest share of UK profits to be £305,435 in 2012, though K&L Gates' structure allows a number of UK partners to take a share of profits in both the UK and global LLPs.
In February, the US-headquartered firm posted its global financial figures alongside a call from chairman Peter Kalis for greater transparency in the way law firms issue their financial statements.
Globally, K&L Gates posted flat revenues in 2012 of $1.06bn (£695m).
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