Maclay Murray & Spens (MMS) has reported a rise in profits in spite of a small dip in income.

In accounts filed at Companies House, the law firm said it was a “satisfactory” result given the difficult economic conditions in the UK.

MMS is one of the largest law firms in Scotland, and has its headquarters in Glasgow with additional offices in Edinburgh, Aberdeen and London.

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Turnover in the 12 months to May 31 this year was £46.7 million, down from almost £47.3m in the previous period. Pre-tax profits increased from £13m to £14.24m while profit available for discretionary division among partners grew from £12.1m to £13.3m.

The firm, led by London-based chief executive and real estate lawyer Chris Smylie, saw staff costs decline from £19.5m to £18m as average employee numbers fell from 404 to 387.  Within that, fee earners dropped from 238 to 233 with support staff down from 166 to 154.

Partner numbers went up from 59 to 61 with the average profit per equity partner rising from £259,000 to £270,000. The highest-paid partner saw their remuneration up from £301,000 to £397,000.

Bank loans were reduced from £2.9m to £2m, and the accounts show the firm’s cash balance had grown from £896,000 to £3.5m at the year end.

That left it with a net cash position at the end of the period of £1.5m, having reported net debt of £2m in June 2011.

It had previously taken on some additional borrowing to finance its move into the G1 building on George Square in Glasgow in May last year which allowed it to bring all staff in the city under one roof.

Mr Smylie said: "The financial health of the firm is strong, underpinned by a balance sheet that is in excellent shape.

While the market has remained challenging throughout most of this period, we have succeeded in growing our profitability."

MMS advised on corporate deals this year including the sale of Robert Wiseman Dairies to Muller, MB Aerospace Holdings acquiring Thomson Aero and the disposal of Quayle Munro's advisory business to its management.

Since the financial year end it has sold its stake in niche fixed fee employment law firm Law at Work (LAW). The management buy-out at LAW in August was led by former MMS chief executive Magnus Swanson who invested alongside LAW chief executive Jane Wright and its legal services director Donald MacKinnon.

LAW reported pre-tax profit of £230,000 on revenue of £1.6m in the 12 months to May 30.

Earlier this year MMS was in talks with Bond Pearce – which has offices in Aberdeen, London, Bristol, Plymouth and Southampton – over a potential merger but the discussions ended in March.

This month Bond Pearce agreed a merger with English focused Dickinson Dees to create a firm with £95m turnover.

Although it has continued to be profitable MMS has shrunk in recent years having once been a firm with turnover in excess of £50m and an employer of more than 500 staff.