A&O bullish as profit up 10pc despite slump
ALLEN & OVERY (A&O) is the first of the UK’s largest law firms to reveal financial results, posting a four per cent decline in turnover and a 10 per cent hike in profits.
The “magic circle” law firm saw revenue for the year ending 30 April fall to £1.05bn from £1.09bn it posted the previous year.
Senior management at A&O told City A.M. that the fall in revenue had been expected as the markets continue to struggle.
“This is still good news for us. We expected a drop in volume because the markets are down. We did an analysis of the markets that we operate in and have invested accordingly,” said managing partner Wim Dejonghe.
He said that up to 60 per cent of A&O’s revenues derived from regions outside of London, reflecting the firm’s decision to move into areas such as Qatar, Sydney, Perth and Jakarta this year.
The firm also landed a raft of large instructions this year, including representing former Lehman Brothers chief executive and chairman Dick Fuld in New York court proceedings arising from the bank’s bankruptcy, advising the creditors on the Dubai World restructuring and recently advising on Ocado’s initial public offering.
Partners at the law firm celebrated a 10 per cent hike in profits per equity partner, which rose this year to £1.1m from £1m.
Dejonghe said: “Our partners and staff have already risen to the challenge of adapting to our clients’ changing needs in uncertain and difficult times.”
It is thought that the remainder of the magic circle law firms, which are expected to report financial results next week, are likely to fall in line with A&O.
Dejonghe remains confident about the year ahead.
He said: “While the outlook for the global economy remains uncertain we are in the best possible shape to handle whatever challenges the market presents.”
Last year, A&O restructured its business, which saw partner, fee earner and support staff headcount reduced by nine per cent.