Legal Business Blogs

Record year for Linklaters as strong M&A run pushes firm over £1.3bn revenue boundary

Revenue at Linklaters has crossed £1.3bn for the first time, up 3% in 2015/16 to £1.31bn, as profits per equity partner hit a new high of £1.403m.

It may have taken eight years, but Linklaters has surpassed the £1.29bn it achieved in 2007/08, following strong performances across its M&A, project finance, dispute resolution and TMT practices. The firm added an extra £43.5m worth of revenue to the £1.266bn it achieved in 2014/15.

It’s a strong showing, in keeping with the improved results released by other Magic Circle firms for 2015/16, following a five-year spell of flat performances broken only by a 5% jump in turnover during 2013/14. The growth is largely organic too, with headcount rising only by 18 lawyers last year.

The rise in partner numbers were smaller still, up by just two to 452, which meant most the rise in revenue ended up in the pockets of partners. Profits per equity partner (PEP) were up 3% to £1.403m, an increase of £35,000. This, perhaps crucially at a time of high-stakes lateral recruitment by US rivals in London and Hong Kong, takes the top of equity at Linklaters to back over £1.8m.

Gideon Moore (pictured), who succeeded Simon Davies as the firm’s managing partner in January said: ‘We had a decent pickup in the second half and we ended up with record profit, record revenue and record PEP. That doesn’t mean there isn’t room for further improvement but if you are hitting record levels in each of these three categories then you would want your partners to feel pretty comfortable with what they have achieved.’

While law firms were impacted by a slowdown in M&A volume towards the end of 2015, partially due to political and economic instability, Linklaters’ corporate group landed a string of big-ticket mandates to outperform the market. ‘M&A had a good year,’ said Moore. ‘Really solid and people thought that would wane because of Brexit but that wasn’t the case.’ Standout mandates include advising SABMiller on its $108bn takeover by brewing rival Anheuser-Busch InBev – last year’s second biggest deal, acting for Belgian supermarket chain Delhaize on its €26bn merger with Dutch grocery giant Ahold and advising Visa Europe on its $23.4bn takeover by Visa.

While Moore is quick to add that he’s ‘quite happy with our current size and shape’ given the ‘low growth legal services environment’, he noted ‘there is a growth agenda’ and a shift away from the cost cutting that symbolised his predecessor’s time at the helm. During the handover period, Linklaters made a double hire in the US after a long period of stasis with the arrival of Baker & McKenzie New York litigation head Douglas Tween and Willkie Farr & Gallagher restructuring partner Margot Schonholtz. Those hires were followed up with the recruitment of Adam Lurie from Cadwalader, Wickersham & Taft in February to head the firm’s Washington, DC litigation and government investigations practice. ‘Our US offering is good for what we’re doing at the moment but there are opportunities that we can bolster our profile and presence,’ said Moore. ‘Investigations and disputes are two key growth areas.’

With popular M&A heavyweight Charlie Jacobs set to take up the senior partner role from Robert Elliott in October, the mood at Silk Street is largely upbeat, bar unease about a devastating raid by Kirkland & Ellis on the firm’s private equity group. ‘The mood within the firm is good,’ said Moore. ‘The best way to deal with the challenges out there is to rally the troops, remain collegiate and believe in our culture and work closely together.’

Read our wrap of big four 2015/16 financial results here.