The depressed oil and gas sector has been cited as a reason for a drop in turnover at Ledingham Chalmers, the Aberdeen headquartered law firm.
Revenue for the year to 31 March 2016 was down by 2% from £12.5m to £12.3m, with Golden Square Wealth Management, the firm's financial arm, contributing £1m of this.
Profits however were down 12% from £4.3m to £3.8m, largely due, the firm said, to increased recruitment with the incomers not yet contributing fully to turnover.
Chairwoman Jennifer Young commented: "Over the last five years we've done a lot of investment in terms of recruiting people and building up teams, and we know they won't all perform at their maximum level to begin with."
She said the firm was pleased with the result given the effect of the oil price slump on the north east. Residential property had been the worst affected of the firm's practice areas.