Freshfields Bruckhaus Deringer and Linklaters have announced broadly flat headline financials for 2011-12, with the figures showing that Clifford Chance has increased its turnover lead on its magic circle rivals.
Linklaters has posted an annual income of £1.207bn, representing a rise of under 1 per cent on 2010-11, when it turned over £1.2bn. The result means it now trails Clifford Chance in revenue terms by nearly £100m, compared with £19m last year (8 July 2011).
Freshfields Bruckhaus Deringer, meanwhile, has posted a turnover figure of £1.139bn, roughly static in comparison with last year’s £1.14bn, with the result meaning it drops below Allen & Overy (A&O) into fourth place for the first time.
Clifford Chance announced a turnover figure of £1.303bn earlier this week, with the number 7 per cent up on its 2010-11 result of £1.219bn (3 July 2012). A&O’s figure jumped 6 per cent to £1.182bn, from £1.119bn in 2010-11 (3 July 2012).
The results show the first change in the turnover rankings for the magic circle quartet since 2009-10, when Clifford Chance regained its leading position after Linklaters had knocked it off the top spot in 2008-09 (3 July 2009).
Freshfields, however, has held onto its position as the top magic circle firm for average profit per equity partner (PEP), posting a figure of £1.299m, down 1 per cent on its £1.308m PEP last year. The figure is based on the the firm having 412 full-time equivalent equity partners, down from 416 last year.
Linklaters’ PEP of £1.184m, based on the average number of equity partners across the 2011-12 financial year, represented a 3 per cent drop on its figure of £1.225m in 2010-11.
However, Linklaters’ PEP for 2011-12 is £1.243m taking into account partners who receive only a proportion of their earnings as an equity partner due to their being in a jurisdiction where the market does not support full-equity status.
The duo is still ahead of A&O and Clifford Chance in PEP terms, with A&O’s figure flat on the previous year at £1.1m. Clifford Chance’s PEP rose by 7 per cent, also to £1.1m.
Linklaters had 440 equity partners as an average across the 2011-12 financial year, compared with 442 in 2010-11. However, on the last day of the 2011-12 financial year it had only 431 equity partners, compared with 436 at the end of 2010-11.
It underwent a major partnership restructuring late last year (8 December 2011).
Ninety-four per cent of Linklaters partners were in the equity as an average across the 2011-12 year compared with 93 per cent in 2010-11. Firm leaders told the partnership conference earlier this year that is was not going to shift to an all-equity model (27 April 2012).
Linklaters turned over £513.5m in London (43 per cent), £88.2m in the Americas (7 per cent), £450.3m in Continental Europe (37 per cent) and £154.7m in Asia and the Middle East (13 per cent).
In total, 39 per cent of turnover was in corporate (£464.8m), 40 per cent in finance (£484m) and 21 per cent in commercial (£257.9m).
Freshfields declined to provide an equivalent breakdown.
Linklaters global managing partner Simon Davies said in a statement: “Over the last year, like many of our clients, we’ve continued to face volatile and challenging conditions amid wider economic strains. In spite of those conditions, and in supporting our clients, our revenues and profits have remained stable and we’ve maintained our financial strength and ability to invest.
“We’ve sustained revenues in the developed markets supported by strong performances in areas such as litigation, competition and regulation and we’ve continued to grow organically in developing markets such as Asia.”
Freshfields chief executive and global managing partner Ted Burke told The Lawyer: “It was a challenging market. We have a significant presence in the eurozone, which saw a fair amount of turmoil. I’d say we were pretty consistent [in terms of practice areas and locations]. We saw a strong performance across the network.”