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Herbert Smith Freehills reduced its debt levels by more than £80 million during the last financial year, after an aggressive push to tighten up its financial discipline.

The firm had net debt of £146 million at the end of April 2018, but this was cut to about £65 million by April 2019, the firm told Legal Week. The net debt figure is calculated by taking gross debt minus the cash on the balance sheet.

The change, which was driven primarily by the firm reducing its lock-up – the time it takes between advising clients and being paid – puts the firm on a steadier financial footing compared with its competitors, many of which have no debt.

HSF financial director Steve Bowers said: "It was a much more positive story than we were expecting. It is hard to point to one thing that drove the reduction in debt but lock-up is probably the one that I would pull out."

Other factors included lower levels of capital investment in areas such as technology and office space.

HSF had by far the highest amount of debt of all the U.K.'s top 50 law firms in April 2018, according to Legal Week analysis of LLP accounts in conjunction with Smith & Williamson. Clyde & Co had £107 million of debt and Norton Rose Fulbright had £58.8 million.

Bowers said the firm's focus on financial discipline got buy-in from partners and teams across the business.

He added he was now "comfortable" with the current debt levels and would not necessarily look to reduce it further, adding: "We expect it to stay around that level. It will fluctuate a bit year to year." But he added that the lower level of debt gives the firm "more resilience" and "slightly more flexibility".

"It leaves us in a really strong place now," he said.