The magic circle law firm saw PEP rise by £401,000 in 2007-08, climbing 38.8% from £1.034m.
The performance, which was revealed exclusively on 2 June by legalweek.com, will be seen as a vindication of the dramatic restructuring of its partnership in 2006, which ultimately saw the firm shed more than 60 partners from its equity. On average, over the past year the firm had 415 equity partners, down from more than 500 in May 2006.
Meanwhile, turnover at the firm has risen by almost a fifth to sit at £1.178bn for 2007-08, up 19.5% from last year’s figure of £986m. The result makes Freshfields only the third
The growth rates are sharply up on 2006-07, when Freshfields saw PEP jump 23.7%, while revenue rose 12%.
The figures will be a welcome boost for the firm after a turbulent 2007 dominated by the fallout of its restructuring and a high-profile age discrimination claim from ex-partner Peter Bloxham, which the firm successfully defended.
Despite a year of controversy, the firm continued to win roles on a string of key mandates, including its role acting for Northern Rock on its attempted sale and privatisation.
Freshfields chief executive Ted Burke commented: “We are grateful for a very strong year, and have seen particular strength coming out of the emerging markets. Expectations for the coming year are reduced — law firms tend to lag behind the broader markets and a significant part of our results are attributable to the robust business environment of the first half of 2007. The current market challenges are affecting us all, and we will continue to stay close to our clients as we navigate our way through the next period.”
The performance sets a tough benchmark for Freshfields’ key City rivals. CC is the only other magic circle firm to have posted results so far, with the firm seeing an 11% hike in turnover from £1.194bn to £1.329bn. PEP, meanwhile, rose 13% from £1.015m to a new high of £1.151m.
CC managing partner David Childs told Legal Week: “We are pleased given that levels of activity have slowed. Revenue in the
All eyes will now be on whether Linklaters, which in recent years has been the strongest financial performer across the City’s big four, can maintain its profitability lead over its old rival. The firm’s headline figures in 2007 were well ahead of Freshfields’, which faced multimillion-pound costs thanks to its partnership restructuring, with Linkaters achieving PEP of £1.294m.
Editors' Blog: 'Restructured Freshfields smashes into PEP elite'
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