Equity partners of A&O Shearman pocketed £2m last year, the first full year after the group’s merger, slightly below the figures from its legacy Magic Circle firm, despite a drop in partners in London.
Magic circle firm Allen & Overy (A&O) and US firm Shearman & Sterling’s merger went live last May, and in its first full financial year, the combined firm reported generating £2.9bn in revenue and £1.1bn in tax before profit.
However, its profit per equity partner (PEP) was £2m, slightly down from the £2.2m A&O equity partners pocketed last year.
Hervé Ekué, A&O Shearman’s global managing partner, said: “In our first year as a merged firm, we have delivered strong results while making important investments in our business, including reshaping the firm to ensure we are optimally positioned to meet client needs.”
The PEP for A&O Shearman is also lower than that of its top competitors, as partners at Linklaters took home £2.2m, and Clifford Chance partners brought in just over £2.1m each.
But, A&O Shearman’s revenue was above Linklaters’ £2.32bn and Clifford Chance’s £2.4bn.
Legal firms go global
This comes as the strategy for all three of these firms, along with Freshfields, which doesn’t publish its results, and is expanding into the US in order to be a contender for the ‘Global Elite’ title.
While Freshfields, Linklaters, and Clifford Chance are opting for a push with new offices filled with people who have names in the US market, A&O chose the merger route.
The legal market was shocked when the merger was announced on a Sunday in May 2023. Shearman & Sterling was a New York-based US firm with a name recognised across the Atlantic.
Since the merger went live, more London partners have exited the firm than have joined.
According to data shared by legal recruitment firm Edwards Gibson with City AM, since the merger went live last May, the firm has lost 32 partners in London, compared to the six it gained during the same period.
The losses include Richard Browne, the former co-head of A&O’s corporate practice, who joined White & Case; Karla Hughes, the former head of trademark and design protection, who also left for White & Case; and litigation partner Matthew Hodgson, who joined Linklaters.
The data, which records moves when they are announced, also noted that two years prior to the merger, A&O lost 22 partners in London, gaining 15 during the same period. During the same two years, Shearman lost 14 partners in the capital compared to only gaining six during the same time.