Magic circle firm Allen & Overy has blamed 'challenging market conditions and a high inflationary environment' for flat profits ahead of its proposed merger with US-based Shearman & Sterling. Results for the year to 30 April posted today show profit before tax of £892m, down 1% from £900m in 2021-22. Client revenue rose by 7% to £2.1bn.

Profit per equity partner also slipped to £1.82m, down from £1.95m last year. 

While the revenue figure was a record, the rate of growth was down from the 10% announced at this time last year. Commenting on the figures, global senior partner Wim Dejonghe said: 'Our diversified business continued to show client revenue growth over the past 12 months, despite intensifying headwinds. Like the rest of the sector, we were impacted by the global economic slowdown, inflationary pressure and geopolitical turmoil.'

The announcement also revealed that its global managing partner Gareth Price has resigned after 30 years with the firm. 

Partners at the magic circle firm are due to vote on a proposed merger with Shearman & Sterling. The proposed deal, announced in May, would create a $3.4bn (£2.74bn) firm named Allen Overy Shearman Sterling. It would have 3,900 lawyers and 800 partners across 49 offices worldwide. 

Dejonghe said the merger 'sets out an exciting future for both our people and our clients, with a uniquely strong combination of local depth, connected by global reach. Our clients are telling us that they are looking forward to the prospect of working with A&O Shearman.'

 

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