The second of the Magic Circle firms to disclose its 2013/14 financial results, Allen & Overy (A&O) has reported an increase in profit per equity partner (PEP) of 7% to £1.12m from £1.05m, with global revenues up by a more conservative 2% to £1.23bn.
Profits before tax were up by 7% to £532.1m.
While the firm has been outpaced by rival Clifford Chance, which yesterday (1 July) disclosed a revenue increase of 7% to £1.36bn, A&O’s global managing partner Wim Dejonghe told Legal Business that he is happy with the increase, particularly given its year-on-year revenue growth. Since 2010, revenue has grown by £168m while profits have increased by 24%.
Dejonghe said the increases are largely due to strong performances in London, Germany, Luxembourg, Singapore and its UAE offices, driven by increasing activity in its banking and litigation practices, while the firm has also made decent inroads in project finance.
The London office currently contributes around one third of global revenues – a jurisdiction where the firm is expecting further growth in this year. ‘There was a nice pick up in London over the last year,’ said Dejonghe. ‘Banking and litigation was very strong, corporate is recovering, capital markets were busy up until the end of 2013 and were softer in the first quarter of 2014, but has now picked up again.’
He added that the firm’s operational support and legal services office in Belfast also significantly contributed to its overall profits.
‘The firm has focussed on efficiency and this has led to the increase in profits. Belfast was a two-year project and is now delivering to the bottom line,’ said Dejonghe.
Launched in February 2011, the Belfast office currently houses 370 staff, including around 310 non-lawyers and 60 lawyers, making it the firm’s third largest office worldwide. Dejonghe added that the legal services centre in Belfast, headed by Jane Townsend, is performing well, and that the number of client matters has doubled to over 300 since last year.
‘The centre does a lot of big volume work such as banking and regulatory litigation, corporate and due diligence. In this market, we compete with second tier firms. We can offer clients the same work under one brand,’ Dejonghe said.
During the last year, A&O opened a new office in Myanmar and announced earlier this year that it will launch new offices in Barcelona and Toronto, with structured finance partner François Duquette set to launch its first Canadian outpost this autumn, to advise on mostly outbound investment for its global clients across the finance and energy markets.
The firm also confirmed it is currently discussing whether to open its first office in Malaysia.