Silver circle half-year growth outstrips magic circle

Silver circle firms Ashurst, Herbert Smith and SJ Berwin have outperformed the magic circle during the first half of the year.

The silver circle firms managed an average growth rate of 24 per cent, compared with the magic circle’s average of 18.3 per cent, based on figures released by Allen & Overy, Clifford Chance and Freshfields Bruckhaus Deringer.

Management at all three silver circle firms highlighted the successes of their finance teams and international offices, while magic circle managing partners were thankful for an outstanding first quarter, but noted an autumn slowdown.

Ashurst and Herbert Smith both increased their revenues by 25 per cent, while SJ Berwin was not far behind with a 24 per cent rise.

Ashurst, which does not include work in progress (WIP) in its figures, has reported a fee income of £147m in six months, up by 25 per cent from last year’s £117m.

Last November it reported an astounding 28 per cent leap at the half-year stage, consolidating that with a 28.5 per cent rise in annual turnover to £275m at the end of 2006-07. Ashurst’s average profit per equity partner of £956,000 at last year’s year-end only just lags behind the magic circle firms’, which all hover around the £1m mark.

Larger City firms such as Norton Rose and CMS Cameron McKenna also outperformed the magic circle, with growth rates of 23 and 21 per cent respectively. Both firms will be cheered by buoyant results that indicate recovery, and Camerons will be hoping that its counter-cyclical practices can hedge it against any downturn.

Another firm claiming it does better during bad times is Lovells. The firm sticks out like a sore thumb among the City’s larger firms with a relatively slow 10 per cent growth – that a 10 per cent increase is considered disappointing is a stark indicator of just how buoyant the market is.

Lovells managing partner David Harris told The Lawyer: “The credit crunch is creating real opportunities for the counter-cyclical sides of our practice, particularly dispute resolution and insolvency, as well as in capital markets. Our counter-cyclical strength and international reach means we expect to see changes in the economy working in our favour.”

Bird & Bird (24 per cent growth) and Nabarro (21 per cent) are the star performers in the mid-market, while national firms Addleshaw Goddard (15 per cent), Eversheds (10 per cent) and Pinsent Masons (10 per cent) all performed modestly.

What the firms had to say…

Simon Bromwich, managing partner, Ashurst: “September was slightly lower, but our finance team was largely unaffected. We’re excited about Tokyo, Singapore and the Middle East.”

The Lawyer’s translation:

We’re feeling quite smug that we don’t have legions of banking lawyers and we’re raking it in right now. Just as well: that Abu Dhabi office launch is going to cost a pretty penny.

Dick Tyler, managing partner, CMS Cameron McKenna: “We’ve made good progress against our targets. We’ve seen significant increases in fee income in all parts of our business. Recent activity levels have been encouraging and we’re optimistic about the prospects.”

The Lawyer’s translation:

Twenty one per cent growth? Can you believe it? We might even hit £250m by next year.

Nigel Knowles, joint CEO, DLA Piper: “We’ve seen a very significant step up in the corporate group, which is taking more market share. Finance, projects and everything regulatory has also done well.”

The Lawyer‘s translation:

Litigation’s a dog.