In some ways this was Linklaters’ year. The firm saw its turnover grow by an impressive 16 per cent to £935.2m and PEP rocket by 26 per cent, from £843,000 to £1.06m. That unprecedented level of profitability puts Linklaters squarely in the game in terms of global competitiveness and goes a long way to silencing those critics who say that UK firms are unable to compete for talent with their US rivals.

Linklaters’ success in implementing an ambitious three-year reorganisation strategy aimed at streamlining the practice to make it more profitable is evident. Although the firm may still lack the critical mass it seeks in New York, and has so far failed to extend fully its relationships with some of its key investment banking clients, the group of US firms from which it arguably could not recruit on purely monetary terms has shrunk significantly.

Away from the US China is a key market for Linklaters. The magic circle firm has turned its fortunes around in the region under the stewardship of Asia managing partner Simon Davies. Recent deals during 2006 include advising Australia’s Telstra Corporation on its $254m (£135.6m) cash acquisition of a 51 per cent stake in China’s largest real estate and home improvement website SouFun Holdings.

Meanwhile, the return of partner Keith Johnson from Europe to head the firm’s Hong Kong corporate and M&A practice, the transfer from Shanghai of partner Paul McNicholl and the hires of Slaughter and May corporate partner Paul Chow and Allen & Overy derivatives partner Chin-Chong Liew for its Hong Kong office all represent signs of the firm’s intentions for the region.

Linklaters’ new three-year plan, launched in September 2006, puts China at the heart of its growth plans. Expect to see Linklaters also focus on India and Korea as the year progresses, not to mention its never-ending hunt for real visibility in the US.