Freshfields edges past CC by turnover while profits hold steady
Author: Jeremy Hodges
02 Jul 2009 | 16:30
Freshfields Bruckhaus Deringer has posted a 9% increase in revenues for 2008-09, taking it ahead of magic circle rival Clifford Chance (CC) by turnover.
The firm’s revenues for 2008-09 stood at £1.287bn, up from £1.178 in 2007-08, with the turnover figure pushing it ahead of CC by fee income.
Profits per equity partner (PEP) stayed roughly static, standing at £1.444 m for 2008-09, compared with £1.435m the previous year. Despite staying flat, Freshfields’ PEP now stands at virtually double that of CC, which saw profits plummet last year.
The firm’s chief executive Ted Burke said that revenues were inflated by the falling value of the pound against the euro and the dollar. Without the currency fluctuation revenues would have been down on last year.
Burke highlighted Freshfield’s involvement in the financial services sector, restructuring and litigation as high points for the firm. The firm has done well out of its longstanding relationship with the Bank of England as well as working on capital injections into the Royal Bank of Scotland and Lloyds Banking Group.
The firm also landed key roles on a number of high-profile rights issues including January’s £4.1bn rights issue for mining group Xstrata, while the insolvency and restructuring team advised on Woolworths’ administration, Oilexco and LyondellBasell's Chapter 11 filing.
Burke told Legal Week: “We have a good year given the circumstances and we are pleased with that. A lot of our people worked very hard on some important instructions and our success is owed to that hard work. The most pleasing thing to us is being called upon by our clients in so many critical situations - that is a great source of pride for us.”
Unlike most of its rivals Freshfields has not announced any significant redundancy programme at associate or partner level, although it did pull out of Bratislava at the end of the financial year, opting to close its only Central and Eastern European office outside Vienna and Moscow.
On the year ahead Burke said that he expected it to be much tougher than last year with M&A and transactional work continuing to fall.
Yesterday (1 July) CC announced results for 2008-09 that saw its PEP slashed by 37% - dropping from £1.156m to £733,000. Revenues for 2008-09 amounted to £1.262m, down from £1.329m in 2007-08, with the weaker pound softening the drop.
Click here to view The Am Law Daily's coverage of Freshfields' results.
COMMENTS (TOTAL 9 COMMENTS)
Twice the profits of CC! The market is really shifting.
Anonymous -02 Jul 2009 | 17:15
Does this mean CC is out of the magic circle?
anon -03 Jul 2009 | 14:30
Phew, thank goodness they froze salaries.
alan -04 Jul 2009 | 00:00
finance lawyer
Why is CC doing so badly compared to others? I was considering a move and it was a target but I'm reconsidering. Any inside?
Anonymous -04 Jul 2009 | 11:50
CC remains a good training ground, so don't worry if you are newly-qualified or have a few PQE years. If you are closer to partnership, do not get anywhere near them. They have management issues, strong-headed people at the top who make the right decisions some of the time but only pretend to take partners' views into account. They have now fallen into the winner's trap and are in freefall. A pity because they are fundamentally not a worse firm than Freshfields or A&O. Links has been in a different league for a while now. Hope this helps.
helen -05 Jul 2009 | 10:54
So Freshfields turns in a stellar annual performance for last year, despite the internal "doomspinning" and external utterances from its Chief Exec. It responds by freezing associate salaries and cutting their bonuses. If I was a Freshfields lawyer, I would have to ask myself these questions - what have I done to deserve this kind of kick in the teeth? When should I be timing my move to a US Firm?
movadoman -06 Jul 2009 | 15:15
Freshfields promised us, a little while back, that never again would we have to hear about things in the legal press before an internal announcement was made. Yet there has been no internal announcement whatsoever about these record-beating results of ours. Another promise broken. The firm has become ridiculously cost conscious suddenly but it is at the expense of staff morale, which is at an all time low here. We all knew that Freshfields was still booming and would defy the market and that a pay freeze across the board was very premature to say the least. Now we have been proven right. Again. And will the partners share the good fortune of these "exchange rate fluctuations" with any of their hard-working staff now? If they were decent and honourable they would, but us jaded old hacks know better.
Roll on the recovery when the recruiters won't stop calling us and when me and my colleagues will start leaving in their droves. Then the partners wil be laughing on the other sides of their Janus faces! Or will they even care?
Freshfields Associate -07 Jul 2009 | 19:48
No, they won't because they can ship over the antipodeans by the droves.
Anonymous -15 Jul 2009 | 19:07
It's time for Freshfields partners to get their moth-eaten chequebooks out to pay a balancing bonus payment to all those to whom they said in May "We'd love to pay you a bigger bonus but there's just not enough money in the pot." Well, there is enough money in the pot, so now they can pay us all a big fat bonus. Ha ha ha!
Dreamer -19 Jul 2009 | 15:29
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