Legacy Allen & Overy saw revenue nudge up 3.4% in the last financial year before its transatlantic merger, against a surge in profits that took average PEP to £2.2m.
A&O Shearman has announced that turnover for the legacy UK firm edged up a modest 3.4% to £2.2bn for the financial year ended 30 April 2024.
The revenue increase is significantly lower than last year’s uptick of 8%, which saw A&O cross the £2bn mark for the first time, becoming the first magic circle firm to do so. Clifford Chance joined it in the £2bn club a week later, with Linklaters only following suit a year later when it this month confirmed that its revenue hit £2.1bn in 2023-24.
While turnover growth at legacy A&O, which formally merged with Shearman & Sterling under the A&O Shearman banner on 1 May, was modest across the last financial year, profit growth was not: the firm reported an increase in profit before tax of more than 17% to a total of £1bn.
This increase took average profits per equity partner (PEP) to £2.2m – up more than 21% from the £1.816m reported in last year’s LB100. Last year, by contrast, A&O reported a slight dip in profit and a 6.6% drop in PEP.
Announcing its financial results, the firm said in a statement that the results had benefitted from a strategic partnership with Inflexion for its aosphere platform. The deal, announced in October 2023, saw the PE house make a strategic investment alongside A&O and US investor Endicott Capital in the legal and compliance data platform, leaving A&O a minority shareholder.
Although legacy A&O’s revenue growth for the last financial year is well short of the 10% Linklaters reported for the same period, its topline figure remains ahead. Its PEP is also higher, with Linklaters reporting a 10.3% increase in profit and an 8% jump in average PEP to £1.9m.
The positive results for legacy A&O come after Shearman saw revenue fall 7.7% to $837m in the 2023 calendar year, against a 3.5% increase in average PEP to $2.556m. At today’s Bank of England exchange rate, legacy A&O’s PEP for 2023-24 converts to $2.823m.
Last year’s Legal Business Global 100 report showed legacy Shearman posting a 10% drop in revenue to $906.9m for the 2022 calendar year. This came alongside an even bigger decline in PEP, which fell 18% to $2.478m.
Going forward, the newly merged firm will run its financial year to 30 April, in line with the legacy UK arm.
Commenting on the results Hervé Ekué, who was elected managing partner of A&O in March and now serves as global managing partner of the merged A&O Shearman, said:
‘In the year leading up to the completion of our merger, we’re pleased to report positive growth for the firm. This is testament to our strategic focus on diversification across regions, practices, and sectors.’
