Allen & Overy has blown away the Magic Circle competition with record profits per equity partner. And other financial results released this week reveal the good times are rolling in for the equity partners at Linklaters, Clifford Chance and Freshfields as well, even where firmwide profits have fallen.
A&O's revenue has increased 16% by £209 million to £1.52 billion and profits have risen a massive 27% to £716 million, resulting in profit per equity partner (PEP) rocketing by an astounding 26%, or an extra £310,000, to £1.51 million.
The firm's performance throws a harsh light on Freshfields, where turnover was flat at £1.33 billion and net profits actually declined 1% to £612 million. PEP at the firm still rose, though, by 5% to £1.55 million. Freshfields joint managing partner Stephan Eliers blamed the stagnating revenue partially on the fact that "this year we lost quite a number of partners in the upper age bracket, both through normal retirement and others leaving". But every cloud, and with 25 fewer equity partners there was also more profit to share between the remaining 396.
Allen & Overy's result highlighted that Clifford Chance's equity partners are the poor cousins in the Magic Circle. Revenues at CC's London office rose 4% in 2016/17 despite, it said, work in the City slowing down in advance of the Brexit referendum. In the face of flat growth in the US and a 2% decline in continental Europe, London contributed to an 11% increase in CC's global revenue, which hit £1.54 billion. Profits rose 12% to £554 million, helping Clifford Chance's equity partners to average earnings of £1.375 million. That's up 12% from a mere £1.2 million last year, but it's still well below their Magic Circle peers. Partners at Linklaters, which posted pre-tax profits of £664 million and global revenues of £1.44 billion (up 8%), each drew on average £1.476 million in the same period (also up 8% on the previous 12 months).
A&O Global Managing Partner Andrew Ballheimer said his firm's results were "strong", and "achieved against a challenging backdrop of political and economic uncertainty". He noted, as CC had of its results, that they included one-off foreign exchange rate gains as a result of swinging post-Brexit currency markets, but said "this does not detract from the real underlying growth we have seen”. Asked why the firm had done so well compared to the rest of the Magic Circle, Ballheimer said that A&O had added 20 offices net since 2007, whereas the others "have either been static or shrunk". Quizzed on whether the bumper results would result in a big pay review for associates, he said "we always aim to pay in the top quartile" and that the firm's localised bonus scheme rewarded staff.
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A&O's revenue has increased 16% by £209 million to £1.52 billion and profits have risen a massive 27% to £716 million, resulting in profit per equity partner (PEP) rocketing by an astounding 26%, or an extra £310,000, to £1.51 million.
The firm's performance throws a harsh light on Freshfields, where turnover was flat at £1.33 billion and net profits actually declined 1% to £612 million. PEP at the firm still rose, though, by 5% to £1.55 million. Freshfields joint managing partner Stephan Eliers blamed the stagnating revenue partially on the fact that "this year we lost quite a number of partners in the upper age bracket, both through normal retirement and others leaving". But every cloud, and with 25 fewer equity partners there was also more profit to share between the remaining 396.
It's been a challenging year for equity partners too, but for different reasons than yours. |
Allen & Overy's result highlighted that Clifford Chance's equity partners are the poor cousins in the Magic Circle. Revenues at CC's London office rose 4% in 2016/17 despite, it said, work in the City slowing down in advance of the Brexit referendum. In the face of flat growth in the US and a 2% decline in continental Europe, London contributed to an 11% increase in CC's global revenue, which hit £1.54 billion. Profits rose 12% to £554 million, helping Clifford Chance's equity partners to average earnings of £1.375 million. That's up 12% from a mere £1.2 million last year, but it's still well below their Magic Circle peers. Partners at Linklaters, which posted pre-tax profits of £664 million and global revenues of £1.44 billion (up 8%), each drew on average £1.476 million in the same period (also up 8% on the previous 12 months).
A&O Global Managing Partner Andrew Ballheimer said his firm's results were "strong", and "achieved against a challenging backdrop of political and economic uncertainty". He noted, as CC had of its results, that they included one-off foreign exchange rate gains as a result of swinging post-Brexit currency markets, but said "this does not detract from the real underlying growth we have seen”. Asked why the firm had done so well compared to the rest of the Magic Circle, Ballheimer said that A&O had added 20 offices net since 2007, whereas the others "have either been static or shrunk". Quizzed on whether the bumper results would result in a big pay review for associates, he said "we always aim to pay in the top quartile" and that the firm's localised bonus scheme rewarded staff.
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And who says lawyers are clueless? That anyone working at a magic circle firm could be considered "poor". Unless you were nobly talking about support staff but it does sound more like a self pitying referral to your own junior lawyer position.
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I pray that none of these firms have taken on too much debt in their excitement
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