The release of financial results by the UK's leading law firms has revealed how the virus has clipped wings at the end of an otherwise excellent year.
Allen & Overy managed to drive revenues up 4% to £1.69 billion and Freshfields' swelled 3% to £1.52bn. But Linklaters' revenue was flat with a 0.7% rise, and all three firms recorded drops in profits.
Profit per equity partner slipped, too, but the managing partners won't be resorting to food banks just yet. While profits in the last few months of the 20/21 reporting period were buffeted by the pandemic, the equity partners at Magic Circle firms continued to absolutely rake it in. Just not quite as much as last year. A&O's PEP fell by 1.7% to £1.63 million, Linklaters' dipped just over 5% to £1.61m, and Freshfields fell 1% to £1.82m.
Clifford Chance was the only firm to have bettered its 2018/19 showing on all fronts. The Magic Circle firm's revenues grew by 6% to £1.8bn, its profits increased by 5% to £666m, and PEP rose 5% to £1.69m.
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"Covid-19 came at the tail end of what was a strong year for us", said Linklaters managing partner Gideon Moore. "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".
Freshfields managing partner Stephan Eilers said his firm had produced a “strong” set of results, “driven by a long-term strategy that has seen us progress despite the challenging economic climate”.
Clifford Chance managing partner Matthew Layton said the firm would focus on remaining "agile and adaptable". He praised Clifford Chance's IT capacity which, he said, "enabled us to embrace the challenge of this enforced global experiment in remote working without any substantive disruption to the high standards that our clients expect from us".
Results have started trickling in from outside the Magic Circle, too, and they paint a similar picture. Last year, Ashurst managing partner Paul Jenkins set a target of pushing PEP to "at least" £1m in 2020, after it soared 31% to £972k in 2018/19.
Covid put paid to that idea, and PEP at Ashurst dropped 7% to £903k. "We were on target to achieve a higher level of growth until late January", said Jenkins, "when markets in Asia Pacific, in which we now generate almost 50% of our revenue, were the first to be disrupted by the pandemic".
Jenkins said its other offices were then impacted as the virus travelled the world, but that Ashurst had "delivered a robust performance despite these challenging market conditions".