Linklaters’ turnover hits £1.255bn, PEP up 5.9% to £1.39m

Linklaters has returned to its strongest revenue position in five years after boosting turnover to £1.255bn for the 2013/14 financial year, up 5 per cent from £1.195bn.


simon davies linklaters
Simon Davies, Linklaters

The figures put it behind Clifford Chance where revenue stood at £1.359m (1 July 2014) but ahead of Freshfields Bruckhaus Deringer where turnover held steady at £1.232bn for the latest financial year.

Linklaters’ average profit per equity partner (PEP) for 2013/14 rose by 5.9 per cent from £1.313m to £1.391m.

The firm’s PEP calculation includes partners in jurisdictions that do not support full equity status. Average full-time equity partners for 2013/14 was 416.4, making comparable PEP for the 2013/14 financial year £1.338m, a 6 per cent increase on 2012/13.

Net profit, meanwhile, reached a six-year high climbing 6.8 per cent from £521.9m to £557.3m. Net profit peaked in 2007/08 at £564m, the same year produced record revenues of £1.293bn and PEP of £1.44m (see table).

Managing partner Simon Davies said a transactional uptick meant that the corporate practice had pushed up revenues over the last twelve months, although he did not confirm exact figures. The pharmaceutical and financial services group had also performed well during the financial year.

The financial services sector continued to account for more than a third of revenue income, driving a mixture of contentious and non-contentious work to the firm.

Davies said real estate was a key growth sector over the past year, with Western Europe generating work in real estate debt, REITs and Canadian pension fund investments. The sector currently generates around ten per cent of the firm’s revenue and the firm has around 100 real estate lawyers.

Davies said Europe was the “standout” region for the Linklaters’ performance on the finance and M&A side. The firm has advised on the issuance of RMB bonds in Europe and developed relationships with the Chinese construction bank’s connections to external markets.

Linklaters has also grown its share of the private equity market, having continued to take on work for clients like TDR Capital, AXA and Apollo. It was also drafted in to advise on several hefty debt restructuring mandates including media giant Prisa’s $3.3bn debt restructure.

The last 12 months saw Linklaters expand its geographical spread through establishing exclusive alliances with Australia’s Allens in May 2012 (23 April 2012) and South Africa’s Webber Wentzel (3 December 2012) in February 2013. 

Revenues generated by Linklaters’ co-operation agreements with Brazil’s Lefosse Advogados, which came to an end in 2012, and Singapore’s Allen & Gledhill produced a 1 per cent like-for-like increase (7 December 2012).

The firm launched its alliance strategy in 2012 and Davies predicted that there would be tie-ups over the next five to ten years but “no more than a handful”.

On Linklaters’ approach to borrowing, Davies said it “liked to be conservative”. The firm has financing facilities in place but since the onset of the financial crisis the firm had not used the facilities and, Davies said, “did not plan to”.

Linklaters: a decade in numbers

Linklaters
  Turnover (£m) % change Profit (£m)  % change PEP (£m) % change
2013/14 1,255 5 557.3 6.8 1,391 5.9
2012/13 1,195 -1 521.9 0.21 1,313 5.6
2011/12 1,207 -1 520.8 1.13 1,243 1.5
2010/11 1,220 3.13 515 1.58 1,225 0.9
2009/10 1,183 -8.86 507 -1.29 1,214 6.76
2008/09 1,298 0.4 513.6 8.94 1,302 9.6
2007/08 1,293 15.3 564 15.1 1,440 25
2006/07 1,121 19.9 490 30.7 1,152 8.5
2005/06 935 16.1 375 29 1,062 26
2004/05 805 11.8 290.8 15.4 843 25.1