Top City firms are blowing away the economic cobwebs and welcoming back fat profits.

Allen & Overy has had a particularly good year, posting a 7% increase in revenue to £1.12bn, and an 8.3% hike in net profits to £420m. However partners won't be upgrading to diamond Rolexes just yet as average profits per partner ("PEP") remained static at £1.1m (those Rolexes may have to wait until the Belfast outsourcing is completed this Autumn). The firm credits international expansion for the good results, with over 60% of turnover now being generated overseas and the firm's new Sydney and Perth offices accounting for almost half the revenue growth.

Meanwhile Herbert Smith has not been doing too shabbily either. The firm's revenues increased by 3.4% to $465m and profits per partner jumped 4% to a healthy £900k. As with A&O, it's Herbies' overseas practices which have been really boosting the firm's coffers:  most notably Asia where revenue shot up by 27%. The London office, however, hasn't been able to hold its own with a 2% dip in revenue, according to a Legal Week report.

Clifford Chance partners have also been popping the Champagne corks as PEP increased by 8% to break through the £1m barrier for the first time since 2008. Revenue has risen too, although it's a smaller 2% increase to £1.2bn. Again this growth seems to have been supported by its international practices, notably Asia (16%) and the Middle East (17%). While UK and US revenues remained fairly flat. Managing Partner David Childs said he remained "cautiously optimistic" about the London market and overall was "pleased to be in growth mode again".

(change from 2010)
Net Profit
(change from 2010)
Profits per equity partner (PEP)
(change from 2010)
£1.12bn (7%)
£420.4m (8.3%)
£1.1m (-)
Clifford Chance
£1.2bn (2%)
£381m (10%)
£1m (8%)
£1.140bn (-) 
   £1.308m (-6.9%)
Herbert Smith
£465m (3.4%)
  £0.9m (4%)
Linklaters £1.2bn (1.4%)
£514.8 (1.5%)
£1.11m (3.3%)
Elsewhere, Linklaters saw modest rises across the board. And the firm managed to translate a 1.5% increase in profits into a 3.3% increase in PEP, so partners will now be trousering a wallet-friendly £1.1m. Managing Partner Simon Davies - adopting X-Factor judge mode - called it an "encouraging performance". Pats on the head all round.

The mood was not so joyful over at Freshfields, with static revenue and a 6.9% drop in PEP meaning partners will need to hunker down for a long cold winter. Although the PEP is still a whopping £1.3m, so it's probably not the bread line just yet. And Managing Partner Ted Burke even made a decent effort to put a positive spin on flat turnover: "'With the global economy struggling, our flat revenues remain a positive indicator of a firm that is well balanced across international markets and sectors." Still, not as positive an indicator of the firm as, say, a growth in revenue might have been. Maybe Freshfields is regretting all that free Olympics work.

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