A&O profits steady
More than 400 partners at Allen & Overy will earn at least £640,000 this year, the firm revealed as it kicked off the magic circle reporting season today.
Allen & Overy’s results for the year ending 30 April show profits up by 7% to £486m on a turnover up 6% to £1.18bn. Profit per equity partner was £1.1m, unchanged from the previous year. The rate of increase for both revenue and turnover was one percentage point lower than in 2010/11.
A total of 427 partners, paid a fixed share of profits plus a profit-related bonus, will receive between £640,000 and £1.6m in 2012 - a fall of between £2,000 and £3,000 in 2011. The average number of partners rose by 29 during the year.
The firm reported that major European markets in France, Germany, Spain and the UK held up well during the year, as well as emerging markets such as Thailand and Indonesia in south-east Asia.
Wim Dejonghe, global managing partner, said: ‘We have a clearly defined long-term strategy for growth, which over the past three years has consistently delivered increases in turnover, profits, partner headcount, offices and locations. We continue to open offices in response to client needs for consistent, high-quality legal services across the world.’
New offices in Washington DC, Casablanca and Istanbul in the past year – as well as future openings in Ho Chi Minh City and Hanoi later this year – have taken the total number of locations to 42 in 29 different countries.
Annual results are expected from Clifford Chance, Freshfields Bruckhaus Derringer and Linklaters later this week.
Comments
I am off to see the Wizard... the wonderful Wizard of Oz
Now that high street law has gone to the dogs it is inevitable that the survivor firms with real legal expertise will regroup and challenge the outer rim of the magic circle as price under-cutting a top firm will be worth while for a former high street firm who has lived on baked beans for so long. The outer rim will in turn create a more inclusive market at the very top by challenging the accepted view that the highest ranked business people will only instruct magic circle firms. Targeted advertising will educate the top people of alternative legal services at a fraction of the cost of the top firms. Certain work, however, may require the very best lawyers and a significant proportion of such work will be retained by the top firms.
Over 90 percent of law firms in this country have been crapped on for years of misguided consumer fundamentalism and the deliberate oversupply of lawyers or wanabe lawyers, which has not impacted on the top firms at all. All this based on the false premise that you can bring a hybred business culture into the law without damaging the principle of an independent legal profession being a check and balance on the excesses of business and government. The low take up of the ABS option has postponed the inevitable legal services crash that will happen in the future, which will hopefully not be the catalyst for the collapse of democracy.
How can it be that a quite respectable established firm on the South Coast, with a few Oxbridge educated Partners, was advertising a basic divorce for £750 plus V.A.T. yet a top firm might quite easily charge £15,000 plus V.A.T. for similar work. Surely the level of expertise cannnot be that different between a high street firm and a top firm.
Sooner or later someone (probably a legal services quango) will be visiting the Wizard of Oz to find out what really is behind that curtain. Value for money and fee transparency has been applied to the high street, why does the same principle not apply at the very top?
If I was a Partner at a magic circle firm I would be angling to sell out to a hedge fund before the illusion is shattered.
Harrods and Primark
Very Interesting post.
Not employed in the profession myself but just a general observation which might be relevant. I think perhaps the reason the magic circle law firms will continue to thrive and be left to their own devices is because they are highly respected by their clients and are not tainted by the poor reputation of the profession generally. The perception is that the partners and staff who work in these firms work their socks off, have the highest standards and their clients will happily pay high fees with that confidence.
It's all about reputation and prestige for the client.
Just think of Harrods and Primark. Harrods will always be there because they have the customers prepared to pay for the brand. If the regulators and quangos are not interested in looking behind the shoddy curtains of many larger firms I doubt if they would wish to interfere in what appear to be the success stories.