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Partners at A&O Shearman have taken home an average of £2.2mn for the year, as profits returned to pre-merger levels after senior lawyers were axed to streamline the enlarged firm.
The firm, which was formed in a 2024 merger between UK “magic circle” firm Allen & Overy and New York’s Shearman & Sterling, said its equity partners had seen a 12 per cent increase in their average pay for the year to April 30. Pre-tax profits rose 14 per cent to £1.2bn.
The financials are an indication that the firm has found its feet after a tumultuous period that saw it cut partner headcount by 10 per cent, while others left for rivals. Partners at the legacy A&O firm took home £2.2mn on average in profits the year before the merger.
A&O Shearman lost 19 partners in London last year, the joint highest of any firm in the UK capital. In total the number of partners fell from about 740 to around 710 over the 12-month period. Unlike many of its peers, the firm has an all-equity partnership.
The firm has also had to contend with a crackdown by US President Donald Trump on Big Law over diversity hiring practices, which re-emerged this week.
A&O Shearman was one of nine law firms that did deals with the administration last year, pledging to deliver $125mn worth of pro bono services to White House causes and dropping diversity terms from its programmes. The deals were done to avoid executive orders directing federal agencies to terminate government contracts with certain law firms or companies doing business with them.
However a lawsuit brought by the American Bar Association last year has put the White House under pressure to turn over internal documents from those deals with the administration.
This week the US Department of Justice subpoenaed several groups, including A&O Shearman, in relation to the deals, according to people with knowledge of the situation.
A&O Shearman declined to comment on the subpoenas.
The firm, which is the first among the “magic circle” group comprising Linklaters, Freshfields and Clifford Chance to report results this year, highlighted key mandates including its role advising European coffee company JDE Peet’s on its €16bn acquisition by Keurig Dr Pepper, and Sizewell C on its £38bn nuclear project.
Revenue for the past year fell slightly to £2.8bn down from £2.9bn the previous 12 months but remained flat in dollar terms.
“These results show our strategy taking hold,” said Hervé Ekué, A&O Shearman’s global managing partner.
He added: “Combined with the way we have streamlined our operation, our profitability has grown significantly. We are a more profitable firm, with a stronger base for sustainable growth.”
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