Turnover (£m): 32
Average PEP: 261
Equity spread (£k): 150-355
Profit margin (%): 26
RPL (£k): 218

Despite headcount continuing to fall, ­Nottingham firm Freeth Cartwright posted a more encouraging set of financials for 2010-11 after a few years of rocky ­results.

Revenue inched up from £31.6m the ­previous year to £32m, while profit margin rose considerably from 21 per cent to 26 per cent. Average profit per equity partner (PEP) also bounced back from £196,000 to £261,000.

Chief executive Peter Smith says the PEP figure marked a welcome return to the levels achieved before the recession. The surge in profitability was down to belt tightening across the firm, including a small number of new redundancies and the downsizing of its Derby office from two floors to one.

The management board includes Smith, chairman Colin Flanagan and 12 elected partners. Its regular bi-monthly meetings have been increased to monthly catch-ups since the recession hit.

Freeth Cartwright operates an entirely merit-based pay structure, with a separate remuneration committee of five elected partners responsible for setting profit share for all equity partners. This is based on a performance-based points system ranging from one to 20, which partners accumulate over a rolling four-year period to avoid short-term fluctuations.

Smith says the firm’s rate of borrowing has reduced substantially over the past year, from a peak of £8.3m, owing to its ­office openings in Manchester and ­Birmingham in recent years, to £4.9m.