Allen & Overy (A&O) has joined magic circle rivals including Clifford Chance and Linklaters by topping the £1m partner profits mark, after the City giant unveiled robust results for the last financial year.
Profits per equity partner (PEP) at A&O rose by almost a third (31%) from last year’s figure of £788,000 to a new mark of £1.03m. Turnover was up from £736m to £887m – an increase of almost 21% - while total profits improved by 36% to £395m.
The results – described by management as “well ahead of budget” – mark a return to form for the City giant, which last year faced criticism after lagging its magic circle rivals in terms of profitability.
Managing partner David Morley pointed to the firm’s corporate department as a particularly strong performer, having placed second in Mergermarket’s European M&A deal rankings for the first half of 2007 and bagging a lead role advising ABN Amro on its £80bn merger talks with Barclays.
Morley told Legal Week: “Corporate has done extremely well. It is one of the key factors behind the results and we’re very pleased with it. Strategically, it is what we have been pursuing and what we have done.”
The number of equity partners at the firm rose from an average of 342 for the previous financial year to 354, while total partner numbers climbed from 424 to 449.
The firm also launched new offices in Saudi Arabia and Abu Dhabi, has developed a Japanese-law capability and is planning to debut in Dusseldorf later this year.
Morley said A&O had trimmed costs in its support function and had also improved its use of technology.
Senior partner Guy Beringer added: “We’ve steadily invested in all the things we have needed to in the last year but are also reaping the benefits of previous investments. We have and are continuing to invest across the board, which is key to absolutely everything.”
Busy deal markets have contributed to a breakthrough year for London’s top law firms, with Linklaters last week announcing a 22% increase in PEP to £1.294m and a 20% improvement in fee income to reach £1.121bn.
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