Legacy Allen & Overy (A&O) grew revenue 3.4% to £2.2bn in the year ended 30 April ahead of its landmark merger with New York firm Shearman & Sterling. 

Having remained constant at £892m the year before, profit before tax jumped 17.2% to hit £1.0bn. Meantime profit per equity partner (PEP) rose from £1.8m to £2.2m, having dipped nearly 7% the year before. 

Commenting on the results, Hervé Ekué, A&O’s former Paris managing partner who was elected global managing partner of A&O Shearman, said the growth was testament to the firm’s “focus on diversification across regions, practices and sectors”.

Highlights for the firm over the course of the year included the launch of an office in Riyadh off the back of Saudi Arabia opening its market to international law firms, which along with a hot IPO market and major infrastructure deals had fuelled a record performance for the firm’s Middle East offices in the 2022/23 financial year.  

Last October A&O also announced that it was spinning out its risk management business, aosphere, to two private equity groups. The firm formed a partnership with Inflexion that saw both companies invest in aosphere alongside US-based Endicott Capital, in a deal that valued the business at around £200m according to the Financial Times and saw A&O retain a “significant minority stake”. 

Standout hires for the 3,000-lawyer firm in the last financial year included a team of five structured finance lawyers in London from Milbank led by partner John Goldfinch and Freshfield Bruckhaus Deringer’s MENA head of finance, Haris Meyer Hanif, who rejoined the firm in Dubai ahead of relocating to its new Riyadh office. 

Meyer Hanif’s hire was a coup from A&O in the run up to its merger with Shearman, which created a firm of almost 4,000 lawyers globally and revenue in the region of $3.5bn when it went live at the start of May. The merger has given A&O an extensive network in the US market and follows decades-long efforts by UK law firms to gain a meaningful presence in the lucrative US market. 

The firm also saw a host of senior departures ahead of the merger, including former global managing partner Gareth Price, who resigned last July citing personal reasons. London fraud partner Andy McGregor exited in October for boutique Enyo Law shortly after the partnership of both firms voted overwhelmingly in support of the merger, while London head of derivatives and structured finance, Emma Dwyer, left last December and later joined Fieldfisher. Earlier this year leveraged finance duo Marwa Elborai and Vanesa Xu also jumped to Kirkland & Ellis. 

Meantime Wim Dejonghe, A&O’s former senior partner and a key architect of the merger, retired at the end of April at the end of his leadership term, with A&O’s former interim global managing partner, Khalid Garousha, succeeding him as senior partner of the merged firm. 

Earlier this week Linklaters – the only other Magic Circle firm to have reported its numbers so far – reported its revenue passed the £2bn mark for the first time in the year to the end of April after growing 10% to £2.1bn. The firm’s pre-tax profits were up 10.3% to a record high of £942m while PEP grew 8% to return to the £1.9m the firm recorded in 2022. Growth was fuelled by the firm’s “best ever results” in the US, where revenue was up 24%. 

Early this year Linklaters made what it called a “transformational step” in its US growth strategy, hiring George Casey, former co-managing partner of legacy Shearman & Sterling, as part of a six-strong M&A team in New York.