LAWFUEL – The Law Firm Newswire –
Profit before tax up over 36% to GBP395m
Turnover up 20.5% to GBP887m
Total number of lawyers worldwide increases by 10% to 2,600
Presence in key global financial markets strengthened with new offices and capabilities in Middle East, Europe and Asia
LONDON – Allen & Overy said today that strategic investment across the globe had helped fuel record 2007 revenue and profits, clearly positioning Allen & Overy in the top six law firms in the world.
Following another outstanding performance across all practice groups and jurisdictions in the year ended 30 April 2007, Allen & Overy reported a 20.5% increase in annual turnover to GBP887 million resulting in an increase in pre tax profit of 36.3% to GBP395m.
Guy Beringer, Senior Partner, said: “The success of our financial results is in part a reflection of the booming market conditions of the past 12 months. It is also a reflection of a truly impressive client list and market-leading work across all jurisdictions and disciplines.
Our position in independent league tables shows that we have now developed a world class corporate and M&A business; tables released last week by mergermarket show Allen & Overy involved in four of the top five largest international M&A deals of the first half of 2007. This performance complements the acknowledged strength of our banking and capital markets practices. This growth over the past year is down to solid hard work, with outstanding clients, around the world.
In New York our strategy of growth through careful hiring is now delivering tangible results both in terms of deals; and our ability to attract the best talent in a very competitive market.
We have also witnessed the increasing importance of Asian markets. Allen & Overy now has over 60 lawyers in Shanghai and Beijing and this year appointed Bengoshi (Japanese qualified lawyers) in Tokyo, allowing us to offer fully integrated Japanese and international legal advice. Another area of demonstrable growth is in the Middle East where we have added a presence in both Abu Dhabi and Riyadh in Saudi Arabia to complement our established presence of more than 30 years in Dubai. This gives us an unrivalled network in the region.
Europe has also performed well for us, and in Germany two new offices in Mannheim and Düsseldorf have just been announced. We have added to our capability in Russia and we are watching the discussions on market liberalisation in India with close interest.”
David Morley, Managing Partner, also commented: “Financial success is only half the story of these results. Behind the results is a consistent record of investment – in people and in our international network – and innovation through a number of firsts: in client service, associate career progression and reward structures, delivery of on-line services, not to mention transparent results reporting. We were delighted to be ranked first in the FT Law 50 and to win the FT’s “most innovative law firm” award for 2007.
We want to grow wherever our clients are growing, in a way which is both sustainable and enables our clients to grow faster. The faster they grow, the faster we grow. To do this we have to put our people first and, by putting our people first, we will put our clients ahead of their competitors. Already this year we have seen a very strong start.
We aim to set new industry standards and adopt new measures of success which enable us to lead the way in client service and satisfaction and make this a place, at the pinnacle of the profession, where people like to work.”
Extract from the Consolidated income statement 2007
£’000 2006
£’000
Turnover 887,106 736,474
Other income 5,608 153
Revenue 892,714 736,627
Operating costs
Staff costs (322,728) (295,665)
Depreciation, amortisation and impairment (20,083) (18,493)
Other operating expenses (156,885) (134,704)
Operating profit 393,018 287,765
Investment income 2,692 3,107
Finance costs (889) (1,262)
Profit before taxation 394,821 289,610
Extract from the Consolidated balance sheet 2007
£’000 2006
£’000
Assets
Non-current assets
Intangible assets 2,923 4,384
Property, plant & equipment 127,696 66,097
Investments 798 870
131,417 71,351
Current assets
Client and other receivables 363,306 294,875
Amounts due from partners 68,708 65,542
Cash and cash equivalents 60,941 65,875
492,955 426,292
Total assets 624,372 497,643
Liabilities
Current liabilities
Trade and other payables (181,712) (139,907)
Current tax liabilities (3,364) (5,651)
Provisions (8,710) (9,561)
(193,786) (155,119)
Non-current liabilities
Trade and other payables (20,949) (3,727)
Provisions (39,665) (36,208)
Retirement benefit obligations (10,100) (22,000)
Partners’ capital (87,675) (74,538)
(158,389) (136,473)
Total liabilities (352,175) (291,592)
Net assets 272,197 206,051
Partners’ other interests 272,197 206,051
5. On becoming partners, the first two years’ remuneration is predominately a fixed prior share of profits. Thereafter, most partners, referred to as full partners, receive 20 profit sharing points, rising by two points every year to a maximum of 50 points.
2007
No. 2006
No.
Average number of partners 449 424
Average number of full partners 354 342
2007
£’000 2006
£’000
Profit before taxation 394,821 289,610
Profits allocated to partners who are not full partners (31,875) (22,184)
Profits available for division among full partners 362,946 267,426
Average profit per full partner 1,025 782
The profit distribution will range from £616,000 for a partner with 20 profit sharing points to £1,540,000 for a partner with 50 profit sharing points (2006 – £480,000 to £1,200,000).
For further information please contact Kathryn Adamson, Kathryn.Adamson@allenovery.com, on 020 3088 4685; Campbell McIlroy, Campbell.McIlroy@allenovery.com, on 020 3088 2783, or David Crundwell, David.Crundwell@allenovery.com. on 020 3088 4015.
