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