Linklaters has become the third magic circle firm to post its 2015/16 financial results, reporting a 3.1 per cent rise in turnover to £1.31bn.
Net profit has also jumped to a record high, up 6.8 per cent to £612m for 2015/16, while average profit per equity partner (PEP) is up 2.5 per cent to £1.45m.
The increases follow a slower year for growth in 2014/15, when the firm posted a 1 per cent revenue rise to £1.27bn. Net profit for that financial year was up 3 per cent to £573m.
Both PEP and net profit are now comfortably above pre-crisis levels, while revenue is edging closer to Linklaters’ record year in 2007/08 when it turned over £1.54bn.
The results are similar to that of Clifford Chance, which posted a 2.6 per cent jump in revenue to £1.39bn on Wednesday (6 July). Profit and PEP were both up almost 10 per cent to £494m and £1.23m respectively.
Freshfields also had a good year, reporting a 6.6 per cent rise in revenue to £1.33bn. PEP was up 7.6 per cent to £1.47m while net profit rose 7.5 per cent to £617m.
Allen & Overy recorded a weaker financial year, with static PEP of £1.2m and a 2.3 per cent increase in revenue to £1.31bn.
Equity spread was also up at Linklaters in the last financial year. Partners at the bottom end of the equity received £745,000 last year, a 4.8 per cent rise on the previous year. Meanwhile plateau partners received £1.86m, a 3.3 per cent increase.
The financial results follow a dramatic 12 months at the magic circle firm. Former managing partner Simon Davies revealed he was stepping down one year early on the same day as the firm released its financial results last year.
Davies has now joined Lloyds Bank with former banking head Gideon Moore filling his shoes. Earlier this year M&A star Charlie Jacobs was elected senior partner and will take over from Robert Elliott in October.
Speaking to The Lawyer about the financial results, Moore said there had been a “great effort across the board on a practice and geographic basis” over the last year.
“Areas that were particularly strong were M&A, projects, disputes, TMT, IP and regulatory,” he added.
By region, he said south east Asia had shown “encouraging growth”, Russia had a “good year compared to previous years”, and London was particularly strong.
“If you’re looking at deals done around the globe that underpin our performance, both Deutsche Börse and SABMiller are in our top 10,” Moore added.
In the first six months of his leadership, Moore launched a review of Linklaters’ 2,000-staff business services function and signed a landmark deal with AI provider Ravn.
The firm also made the decision to spin off its current PRC lawyer contingent in China in favour of the group launching an independent firm that could enter into a joint venture with Linklaters four years down the line.
Planning for the next few years, Moore said: “I need to have a think about the impact of [the Brexit] decision on our budgets.
“We’re budgeting for a small increase in revenue in the current year – a bit higher than last year.”
Since he took over the top job, speculation that Moore has set his sights on a US merger have been rife. Jacobs’ victory in the senior partner race has also led to renewed discussions about the possibility of breaking lockstep in London in order to attract star partner hires from US firms. Linklaters has been much slower than its magic circle rivals to flex its lockstep over the last 18 months.
Linklaters has seen a number of departures in the last financial year, most notably a string of private equity partners to Kirkland & Ellis and Sidley Austin.
It also made some significant hires including Baker & McKenzie disputes veteran Tom Cassels in November.