LEGAL giant Allen & Overy (A&O) has today revealed it raked in revenues of £1bn over the last financial year, 7 per cent higher than last year, although its profits per partner fell amid a “challenging” business environment.
The firm, which in February revealed a 450-job cut to align itself with the shrinking size of the financial sector, said its average profits per equity partner were 9 per cent over last year at £1m.
A&O said it drew 50 per cent of its income overseas last year and foreign currencies have become more valuable as the pound has plummeted.
Restructuring costs of £46m helped to depress the profit figures, the firm added.
“This has been an exceptionally challenging year for businesses everywhere – including ours.
We have not been immune to the impact of the global recession,” said A&O managing partner Wim Dejonghe.
He said A&O performed particularly strongly in Western Europe and the Middle East, thanks to strong trading conditions and the relative strength of currencies in those areas compared to the pound.
The results, which follow recent statements from three fellow “magic circle” legal powerhouses, mean the City’s top four legal firms all raked in at least one billion in fees last year despite the financial crisis.
Despite the revenue boost Allen & Overy has not overtaken Clifford Chance in the legal league – the former biggest legal firm by revenues this month reported a 5 per cent fall in revenues to £1.26bn taking it behind Linklaters and Freshfield Bruckhaus Deringer.
Linklaters’ place as the UK’s biggest legal firm is now sealed – it generated a giant £1.3bn income in the year to the end of April.
The fifth “magic circle” giant, Slaughter and May, is not a limited liability partnership, and so is under no obligation to report its results.