Linklaters sees turnover and profits edge up as Freshfields PEP dips 7%

Linklaters and Freshfields Bruckhaus Deringer have both announced their 2010-11 financial results, with Linklaters seeing marginal increases in both turnover and partner profits (PEP) and Freshfields posting static turnover against a 7% dip in PEP.

Turnover at Freshfields held steady at last year’s figure of £1.14bn, while PEP fell from £1.406m in 2009-10 to £1.308m.

PEP ranged from £1.475m at the top of the equity down to £590,000 at the bottom of the lockstep, with a total of 415 equity partners across Freshfields’ network compared with 414 the previous year.

Freshfields managing partner Ted Burke said: “Turnover this year is what we were expecting and in line with our budget, as last summer there was a real slowdown in activity in the transactional market, and we felt it would be quite an achievement to keep revenue steady, so we’re pleased.

“Regarding profits, we have made a significant amount of investment in our network this year with a number of partner hires, and this would have had some affect on PEP. Litigation, cartel and capital markets all gave a particularly strong performance in 2010-11, while internationally our China, Moscow and German offices all stood out.”

Meanwhile, Linklaters saw revenues increase by 1.4% to £1.2bn during 2010-11, up from the previous year’s figure of £1.18bn. The firm’s strongest-performing practice area was corporate, followed closely by finance, with the groups bringing in £475.3m and £470.3m respectively.

Continental Europe was the largest revenue generator outside of London, bringing in £449.1m compared with £510.4m in the City, with Asia & the Middle East and the Americas bringing in £151.4m and £89.1m respectively.

While Linklaters’ pre-tax profit increased by 1.5% to £514.8m, average profits per equity partner (PEP) increased by only 0.9% to £1.225m, up from £1.2m the previous year, based on the number of partners on full entitlement.

Dividing profit by the 442 partners the firm averaged throughout the financial year leaves Linklaters with an average PEP of £1.16m. The top the firm’s lockstep stands at £1.559m, with the bottom standing at £624,000.

Managing partner Simon Davies commented: “The second half of the financial year was significantly stronger than the first, with a strong uptick in corporate activity. The firm saw a 9% revenue hike during this period, which is a good sign going forward. The emerging markets continue to perform well, and will be one of the firm’s core areas of investment in the current financial year.”

The results means Linklaters’ turnover is only marginally behind Clifford Chance’s (CC’s) figure of £1.22bn, with PEP at both Linklaters and Freshfields higher than at both CC (£1m) and Allen & Overy (£1.1m).

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