Allen & Overy
16 September 2008
Firm: Allen & Overy
Profit per equity partner: £1,122K
Earnings per partner: £1,031K
Equity spread: £658K-£1,645K
Net profit: £447m
Profit margin: 44 per cent
Revenue per fee-earner: £378K
Revenue per lawyer: £501K
Revenue per partner: £2,143K
Revenue per equity partner: £2.81m
Total number of fee-earners: 2,686
Total number of qualified partners: 2,027
Total number of partners: 474
Total number of equity partners: 362
Total number of female partners: 71
Total number of female equity partners: 51
Total number of staff: 4,949
Leverage ratio (equity partners/fee-earners): 1:4.6
Allen & Overy passed a milestone this year - for the first time the majority of its revenue was generated overseas, with the firm’s UK home contributing only 49.6 per cent, or £425.8m.
The firm has invested £100m in its global network in the last five years, including around £25m in the last financial year alone. The return on the cumulative investment currently lies at around 10 per cent.
A&O senior partner David Morley said that around two thirds of the work that the firm does now involves two or more jurisdictions. The European offices contributed a quarter of the turnover total, Asia around 10 per cent, the Middle East 7 per cent and the US 8 per cent.
Of these, the Middle East, China, Russia and Asia practices had grown the most, with the United Arab Emirates offices more than doubling in the last financial year, aided by the opening of the Abu Dhabi last year (as reported 15 June 2007). After a recent recruitment drive which saw 20 lawyers, including six partners, sent out to the region, the firm now counts more than 100 lawyers there (as reported 8 September).
The operating expenses, excluding staff costs, ballooned by 23 per cent this year to £192.5m; staff costs rose by 12 per cent to £361.1m.
Average profit per equity partner (PEP) rose 9.5 per cent to £1.12m. The total profits distributable to full equity partners increased by 12 per cent to £405.7m, though by contrast, the average size of the equity partnership increased by only 2 per cent this year to 362.
While PEP came in at £1.12m, those at the bottom of the lockstep will pocket £658,000 while plateau partners will receive £1.65m. A&O has one of the longest locksteps in the City, running over 15 years from 20 points to 50, partners accruing two points per year. This year each point is worth £33,000, up from £30,800 last year.
A&O partners usually remain at the fixed share level for two years before entering the lockstep. The number of fixed-share partners grew by 18 per cent, to 112. They drew a total of £41.5m out of profits - an average of around £371,000 each, which is 10 per cent more than last year and accounts for the bulk of these partners’ remuneration.
The number of qualified lawyers at the firm increased by 8 per cent over the year, to 2,027, while revenue per lawyer rose 17 per cent to £501,000.
In terms of practice areas, banking and capital markets still dominate, pulling in 44 per cent of revenues globally and half of all fees in London - a greater share than at any other magic circle firm. However corporate has in recent years been catching up strongly, comprising a third of revenues globally, though still only 24 per cent in London.
Litigation currently stands at only around 10 per cent of global turnovers but is planned to increase to 15 per cent of the total within four years (as reported by The Lawyer, 1 September). The firm aims to cash in on an expected boom in litigation and arbitration, as well as tightening its relationships with its main corporate clients’ general counsels.
2006-07: Finance 18, corporate 9, IP 1, litigation 2, tax 3
2005-06: Finance 7, corporate 2, litigation 3, private client 1, tax 1
2004-05: Finance 9, competition 1, corporate 4, employment 1, litigation 2, tax 3
2006: Finance 3, competition 1, corporate 6, litigation 3
2005: Corporate 3
2004: Finance 3, litigation 1, real estate 1, tax 2
Intake as percentage of partnership: 10.2
New female partners as percentage of intake: 17.4
Firms recruited from: Day Berry & Howard, Dewey Ballantine, Freshfields BruckhausDeringer, Gianni Origoni Grippo & Partners, Lovells, O’Melveny & Myers, Norton Rose
Equity structure: 358 equity partners, 92 non-equity
Practice area(s) most heavily promoted: Banking/finance, corporate
*Figures supplied relate to the calendar year
Allen & Overy enjoyed a much healthier outlook all round in 2006. Internal promotions more than doubled on 2005 to the highest rate ever, lateral hires skyrocketed and partner departures slowed to fewer than 20. That said, London’s corporate team saw seven partner exits and the firm’s Turin office was shut down.
London still accounts for nearly half of all promotions, but it is somewhat overlooked when it comes to partner hires, taking just two in 2006. As a whole Asia did well in 2006 with the most promotions in six years, with five new partners. Unsurprisingly, banking and finance saw the most overall internal promotions, but when looking at total new intake, corporate came hot on banking’s heels. The magic circle firm has been making real efforts to address the hiring and retention of its staff and introduced a swathe of initiatives in 2006, including the introduction of the roles of senior associate, counsel and PSL counsel, as well as three-year sabbaticals.
- Web: www.allenovery.com/careeruk
- Telephone: 020 3088 0000
- Fax: 020 3088 0088
- No. of Trainees: 240
- No. of Trainee Vacancies: 120
- Training contract application deadline: Non-Law 18-01-2008/Law 31-07-08
- Individual interview: Yes
- Panel interview: No
- Assessment day: No
- Psychometric test: No
- Written exercise: No
- Presentation: Yes
- No. of Seats:4-6
- Opportunities Abroad: Yes
- Vacation Schemes
- No. placements: 75
- Summer vacation scheme application deadline: 18/01/2008
- GDL/CPE Intake: 45
- GDL/CPE funding
- Fees: Yes
- Maintenance: £5,000-£6,000
- LPC funding
- Fees: Yes
- Maintenance: £7,000
- Start: £36,200
- Qualification: £65,000
- Season ticket loan: Yes
- Healthcare: Yes
- Pension scheme: Yes
- Life assurance: Yes
- Bonus scheme: Yes
- Gym membership: Yes
- Subsidised lunch: Yes