Legal Business Blogs

Freshfields US revenues rise 26% as firm breaks £2bn mark for first time

Revenue at Freshfields rose to more than £2bn for the first time in 2023-24, the firm’s newly released LLP accounts have confirmed, following the decision to stop releasing financial information in line with its UK-headquartered peers.

The accounts, filed with Companies House, show significant growth in revenue and operating profit, although profit available for discretionary division dropped by 9% after a change to accounting procedures meant previous year’s figures were restated.

For the financial year ending April 2024, global revenues rose by more than 18% from £1.79bn to £2.12bn, while operating profit also saw a notable jump, climbing 40% from £459.1m to £643.1m.

The accounts provide a breakdown of revenue growth by geography, with the US – where Freshfields has heavily invested in recent years – standing out as the firm’s fastest-growing region, with revenues up 26% from £311m to £391m.

Recent US hires have included the addition of private equity M&A duo Neal Reenan and Ian Bushner from Latham & Watkins in New York, as well as former Federal Trade Commissioner Christine Wilson in Washington DC.

Elsewhere, income from the Middle East and North Africa also grew strongly, increasing by 24% to £42m, with Europe revenues rising 20% to £1.561bn. However, Asia revenues dipped by 11% from £142m to £127m.

The accounts also show profit available for discretionary division among members dropping by 9% from £725.7m to £664.9m, although this decrease was attributed to the adoption of the new IFRS 17 accounting standard.

That move, a technical accounting change, necessitated a restatement of last year’s numbers, although it is understood that it has resulted in no change to the firm’s trading results or cash flows.

The last time the firm publicly reported profit per equity partner was summer 2023, when the figure stood at £2.09m. In last year’s LB100 rankings, PEP was estimated at around £2.4m.

The accounts also reveal that Freshfields’ bank loans rose during the 2023-24 financial year, with committed bank facilities rising to £150m from £135m in 2022-23, and bank loans up by £35m to £50m.

Freshfields also saw a rise in employment costs over the year, with salaries increasing by 14% from £838.5m to £954.5m. Those figures are only set to rise further still, following the firm’s move to increase pay for newly-qualified lawyers to a new high of £150,000 

The accounts come on the back of a strong year for deal activity for the firm, which ranked fifth in the London Stock Exchange Group’s global M&A legal adviser rankings, after roles on 259 deals worth a total of $268.8bn.

anna.huntley@legalbusiness.co.uk