Squaring up in the Magic Circle

But the really big story looks like being at the top of the tree. On the face of things Allen & Overy and Clifford Chance have made up much of the lost ground on rivals Freshfields and Linklaters.

A&O’s PEP is up 10 per cent (see story) while CC’s is up a whopping 25 per cent (see story).  Indeed, Clifford Chance has now stolen back its crown as the UK’s largest firm by revenue.

But, frankly, who cares about revenue? Dig a little a deeper and things look slightly different.

CC’s PEP is still 20 per cent down on its 2007-08 high of £1.17m while A&O’s, at £1.1m, lags behind Linklaters’ £1.21m (see story) and Freshfields’ mighty £1.41m (see story).

But, frankly, who cares about PEP?  Profit margin is really where it’s at - Freshfields’ 52 per cent, Linklaters’ 42 per cent, A&O’s 39 per cent and CC’s 29 per cent tells its own story.

The results say less about a return to form in the UK legal market and much more about the rapidly developing two-tier nature of the magic circle.