The Lawyer Africa Elite 2014 features an in-depth look at 46 leading independent firms’ strategies in 15 key sub-Saharan jurisdictions, as well as the views of in-house counsel from some of Africa’s largest companies... Read more
This year, The Lawyer’s annual ranking of the largest UK law firms by turnover is available as an interactive, digital benchmarking tool. For the first time this will allow you to manipulate each data set against the metrics of your choice.
Allen & Overy reveals first magic circle LLP accounts" />Allen & Overy (A&O) is the first of the magic circle firms to release its limited-liability partnership (LLP) accounts, a move that will almost inevitably be followed by Clifford Chance (a US LLP), Freshfields Bruckhaus Deringer and Linklaters.
The figures show a prudently run business that can now, with some certainty, call itself transparent. Here are the highlights.
1. Turnover is up by 2 per cent on the previous year. "The days of massive turnover growth are gone," says senior partner Guy Beringer. "I wouldn't expect the firm to grow dramatically. It's more a question of becoming more efficient, which means working smarter, recording better and better structuring of teams."
2. Costs were cut by £5m. This costs figure also includes the staff bonus pool. In 2005, that pool came to £19.1m, up from £16m the year before. This is equivalent to 11.5 per cent of salary for every member of staff, or an average of £4,600 per person.
3. A&O currently has 95 fixed-share partners. The average remuneration for those partners is £259,000.
4. Equity partners start at 20 points, moving up to 50 over 15 years. Average profit per point stands at £20,085. There are 24 partners at A&O who currently earn more than £1m. Mean for equity partner capital contributions is 33 points, which equates to £370,000.
5. Fixed assets: including IT, office interiors and furniture, but also £6m spent on the new building in Spitalfields.
6. Debtors: £191m of this figure is client debtors, representing 67 days of annual turnover. The £259,661 figure also includes £43m of deferred income, or unbilled revenue (formerly work in progress (WIP)) and £24m of other assorted debts. Not surprisingly for a firm that, as finance director Ian Dinwiddie puts it, "hitched itself to the GAAP wagon a few years ago", A&O has valued all the WIP in the accounts in accordance with Application Note G to FRS5 for two years. Consequently, there was no uplift this year. Last year, the uplift was brought in as a reserve and was not distributed as additional profit.
7. Amounts due from partners: this represents the total drawing distribution to partners on account of the current year.
8. Cash at bank and at hand: at 30 April 2005, partners had set aside £42m to fund the fit-out of the new building at Bishops Square, Spitalfields. That scheme of capitalising partner drawings began in 2000. A&O has also entered into separate banking facilities of up to £50m to finance the rest of the move.
9. Provisions for liabilities and charges: includes liabilities for annuities to retired partners, which have been taken onto the balance sheet and amount to £26m. This line also includes the 'soft landing' scheme, paying off partners who retire early.