Allen & Overy Revenue Rises, Profit Dips in Year Through April

Allen & Overy’s revenue rose and its profit dipped in the financial year running through April, which saw the U.K.-based firm end merger discussions with O’Melveny & Myers while its investments in alternative legal services boosted revenue.

The Magic Circle firm’s revenue rose 4% to $2.14 billion while its profits per equity partner dipped 1.7% to $2.06 million, it said in a statement on Thursday. The firm has 550 partners and 2,350 other lawyers. All of its practice areas saw increased revenue, with the firm pointing to litigation and real estate as “notable” performers.

Most of the firm’s financial year occurred before the coronavirus pandemic hit Big Law’s bottom lines, but Allen & Overy has been proactive in responding to the difficult market conditions. It asked partners to contribute capital, gradually reduced partner profit distributions, and froze salaries of associates and staff, Law.com reported in late March.

The firm said the outlook for the current year is “uncertain” and it anticipates “tough market conditions.”

“These results, combined with the measures we have taken in response to the pandemic, put us in a strong position to continue to support our clients as they navigate the more difficult market conditions ahead,” global managing partner Gareth Price said in a statement.

The firm’s innovation-focused advanced delivery & solutions group saw revenue grow 15%, but the firm did not provide a total figure.

That group provides services outside of traditional legal advice, including consulting, sourcing solutions, and a tech incubator.

Over the past financial year the group launched new products including a technology tool aimed at assisting banks with the transition from the LIBOR interest rate. It also launched a technology-enabled contract review service to help clients understand how their contracts may be impacted by Covid-19.

Allen & Overy’s year-long merger discussions with U.S. firm O’Melveny & Myers were abandoned in September.

The firm said the U.S remains a “strategic priority” and noted the addition of eight new partners stateside, including five lateral hires, in its last financial year.