With financial reporting season in full swing, Linklaters is the latest Magic Circle firm to drop its financial results, reporting a 7% revenue increase from £1.8bn to £1.9bn, seeing it fall just short of the $2bn turnover barrier passed by both Allen & Overy and Clifford Chance recently.

Pre-tax profit is down by 2% to £854m from last year’s £872m, translating to a 5% decline in PEP from £1.87m to £1.78m.

Linklaters managing partner Paul Lewis said in a statement: ‘We’re pleased to have delivered a strong financial performance, despite a challenging high-inflation environment and ongoing geopolitical instability.’

He added: ‘Entering the new financial year we have seen a strong deal flow, particularly across energy & infrastructure, high-end M&A and from financial sponsors, notwithstanding the wider slowing of the global M&A market. The challenging economic environment has led to an increase in restructuring and insolvency matters and we have also seen an uptick in regulatory and criminal investigations as well as a rise in class actions, particularly in the tech sector.’

Linklaters reports that it has seen ‘significant growth’ in revenue from high-end M&A with top mandates that include advising Carrier Global Corporation on its acquisition of Viessmann Climate Solutions and HSBC on the sale of its Canadian banking business to Royal Bank of Canada.

Similarly, the firm also gives credit to the performance of its energy sector, with a particular focus on energy transition mandates that made up the majority of energy-related work over the last financial year. Whilst it is public knowledge that Links has struggled to make an impression on the US market, the addition of its energy and infrastructure team in the US has resulted in some mid-tier US mandates, including advising Actis on its new $500m Japanese renewables platform.

Beyond financials, the firm also reported that it had elected 41 new partners and 53 counsel in its latest promotion round, while meeting its 40% global gender diversity target for female partner promotions, and its 15% target for under-represented minority ethnic partners in new partner elections annually in the UK and US.

In the legal tech arena, the firm also reported that CreateIQ, its document automation and contract management platform, ‘grew at a rate of nearly 100% during FY2023 with over 100 digitised templates added, attracting over 300 institutions including major banks, asset managers, insurers and governments. ReportiQ, the firm’s next-generation due diligence reporting platform, ‘has now been used by Linklaters lawyers across 17 offices and external counsel in 21 countries to generate reports on €18bn worth of deals’.

Links is the third member of the Magic Circle to publish its financial results so far, with both A&O and Clifford Chance officially breaking the £2bn barrier. A&O’s revenue grew by 8% from £1.94bn to £2.1bn, while CC recorded a revenue increase of 5% from £1.969bn to £2.062bn.

With Freshfields the last of the four UK elite international firms to post its results, the picture so far is clearly one of modest revenue increases matched by a decline in profitability this year, as firms across the globe driven by transactional work struggle with the downturn in deals.

Ayesha.Ellis@legalease.co.uk

This article first appeared on Legal Business

Despite the pandemic, the 2020/21 financial year proved to be an improved outing for Linklaters as revenues inched up and profits saw a robust increase.

Turnover nudged upwards by 2% to reach £1.67bn – a modest increase, but an improvement on the marginal 0.7% growth seen last year. More notable was the firm’s rebounding profits: pre-tax profit stands at £815.3m, a 12% jump from last year, while profit per equity partner (PEP) grew by 10% to hit £1.773m.

Profit per all partners, which takes into account salaried partners, was also up by 10%, reaching £1.707m.

Viewed in the additional context of Linklaters opting not to use any governmental financial support packages throughout the year, the results are a respectable upgrade.

Linklaters managing partner Paul Lewis described the figures as ‘a very strong set of financial results’. He attributed them to ‘the hard work and excellent performance of our people over that period, especially given its unique challenges’. Lewis added: ‘Our global capabilities and enduring client relationships also came to the fore as clients turned to us to help them to navigate the myriad issues arising from the pandemic.’

Lewis is still in the early days of his premiership, having been elected as successor to Gideon Moore by Linklaters’ partnership in July.

Linklaters becomes the latest Magic Circle firm to announce its financial figures this summer, comfortably keeping in line with the standards set by the rest of the group. In July, Clifford Chance similarly unveiled modest revenue growth amid pacier profit increases.

In the same month, Freshfields Bruckhaus Deringer posted solid 5% increases to both its revenue and PEP, while Allen & Overy completed the trend with a 5% growth in revenue which was outstripped by a striking 17% increase in PEP.

tom.baker@legalease.co.uk

This article first appeared on Legal Business.