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Magic circle duo release financial results

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Effect of COVID-19 shows up in Linklaters and Allen & Overy figures

Allen & Overy and Linklaters’ London offices

Magic circle firms Linklaters and Allen & Overy have reported broadly flat financial results with some fall in profitability.

Linklaters confirmed £1.639 billion in revenue, a small 0.7% increase from last year. However, the firm’s profits fell by 3.3% to £726.9 million, while profit per equity partner dropped by 5.1% to a (still massive) £1.61 million.

Meanwhile, Allen & Overy’s revenue grew by 4% to £1.69 billion. But the firm’s profit is down 2.5% to £690 million, and profit per equity partner shrunken by 1.7% to £1.63 million.

So, relative to most law firms, big earnings and high profitability, but disappointing levels of growth — which has been the story with magic circle firms for a number of years now.

Linklaters and Allen & Overy, who are both headquartered in London, have suggested that they were doing well until COVID-19 uncertainty impacted the last two months of the financial year ending 5 April 2020.

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Commenting on the financial results, Linklaters’ managing partner Gideon Moore, said:

“Covid-19 came at the tail end of what was a strong year for us at Linklaters. Notwithstanding the change in circumstances arising as a result of Covid-19, we have been able to continue to support our people and our clients. Our long-term strategy remains unchanged: investing in our globally diverse talent base and growing our practices sustainably to best serve our clients.”

Meanwhile, Allen & Overy’s global managing partner, Gareth Price, said:

“These are strong results, with revenue growth in all our global practices, proving the success of the broad-based strategy we have followed over the last decade

“Our growth is due to the hard work of all our people and I would like to thank everyone for their dedication in the last twelve months. These results, combined with the measures we have taken in response to the pandemic, put us in a strong position to continue to support our clients as they navigate the more difficult market conditions ahead.”

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12 Comments

Anon

Not bad given that March and April were awful months. Most businesses saw some recovery in May and June so 2020/21 may not be a total bloodbath.

MC Trainee

Genuine question here – I started my TV in March but was immediately WFH so didnt get to meet my (female) supervisor.

Last weekend she suggested we meet up for a drink, otherwise we wouldn’t see each other for the whole seat.

To cut to the chase, we ended up getting drunk and one and one thing led to another. Now I don’t know what to do. Any advice?

MC Supervisor

Propose.

Anonymous

Thats hot. When’s the wedding?

City Life

That’s city law for you. People spending so much time holed up in an office most will jump when they see fresh meat. Hope you had fun 🙂

MCT

Blackmail her

Ronald Dworkang

Not bad. Not great. About what was expected.

MC lawyer

Welcome to the MC life where this kind of stuff happens

(Unless you feel abused / taken advantage of, then you should tell HR)

L

Legal Cheek should put together a centralised analysis of how firms are responding to Covid: redundancies, salary reductions, office closures etc. It’s really important for people to know how firms not only treat their people in the good times but also the bad. Also helpful for those applying to firms. Would also be good to compare firms’ responses to Covid to 2008.

It wouldn’t look great for instance if next year Links and A&O started culling people on the back of decent results this year, and contrasting their response covid to 2008.

Just some thoughts. Proper analysis is needed though.

Anon

And the analysis must also include US law firms and stealth layoffs.

It should also show figures per practice group / department because some partners are literally booting out associates and support staff because of a lack of business on “performance issues” to avoid giving the firm a bad name.

HR and others at the firm may not even know that the real reason is a slow down because the partner in question wants it to look that way.

Sorry to say but avoid US firms if you can, they are extremely shady and will not hesitate to burn the “rule book”.

Pablo Hernandez

WE ARE LEEDS!

Anon

Check whether your firm has a relationship policy (many firms do now, as a result of recent cases of partners abusing their power) and make sure you are adhering to that i.e. if one or both of you is required to disclose that something happened. The fact that she is a woman is irrelevant – it is inappropriate behaviour for any supervisor.

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