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In summary:
- Client revenue up by GBP170 million (10%) to GBP1.94 billion (USD2.65bn; EUR 2.28bn)
- Profit before tax up 9% to GBP900 million (USD1.23bn; EUR1.06bn)
- Profit per equity partner (PEP) up 3% to GBP1.95 million (USD2.66m; EUR2.29m)
- Exceptional revenue growth from the U.S. which was responsible for more than 50% of firm revenue growth following continued and significant investment
- Strong performance across the firm’s global network, in particular in the U.S., UK, Europe and the Middle East.
- Increasing work borne from client demand to navigate the energy transition, rise of private capital and technological transformation
- Revenue from Advanced Delivery & Solutions goes from strength to strength, increasing by 14%, largely driven by aosphere, A&O Consulting and Peerpoint
- Continued progress on the firm’s drive to build a more diverse and inclusive firm, including by setting new gender diversity targets
- Increased pro bono hours across the firm and a significant financial and legal advisory response to the invasion of Ukraine
Commenting on the results, global managing partner Gareth Price said: “Last year we demonstrated the power of our international platform to meet the sophisticated needs of our clients in an increasingly complex landscape for global businesses. Our clients are facing major new challenges and we have invested to broaden our capabilities to support them as well as expand our expertise in key markets to maintain our industry-leading local depth connected by global reach.
The global economy continues to be impacted by high inflation and the business environment for our services has been softening in recent months. We expect these conditions to persist in the coming months but we remain confident that our diversified business provides resilience and positions us well for the more challenging conditions ahead.”
Key trends driving client demand
The firm has developed a global technology practice advising on cutting edge and high profile technology-associated work. In the last year this included advising the market’s largest players such as Meta and Google in litigation and on key strategic projects and growth companies in the sector on key developmental milestones, such as advising Checkout.com on raising USD1 billion in its Series D funding round at a valuation of USD40 billion. The firm continued to invest in its global technology capability throughout the year, building its tech practice in the U.S. with lateral hires and opening offices in San Francisco, Silicon Valley and Boston.
The private capital market has doubled in size in the last five years and is predicted to continue to grow at a similar rate. Long-term strategic investment has seen the firm increase private capital M&A revenue, advising a growing roster of premium private capital clients around the world. In the last financial year this included advising Bridgepoint on the sale of Element to Temasek, a deal which involved teams in multiple European offices, the U.S. and UK across M&A, finance, antitrust, IP and more.
Environmental, social and governance issues dominated global disputes, transactions and financing activity and in the last year A&O’s market-leading global ESG practice continued to advise on key mandates in this space. Standout examples include advising Saudi Electricity Company on a landmark USD500 million untied green financing facility signed with Japan Bank for International Cooperation and the joint lead managers and joint bookrunners on the world’s first sustainability re-linked bond issuance by Bank of China. In the social arena, a U.S. team of lawyers wrote a ‘Know Your Rights Guide’ for journalists, covering demonstrations in the U.S. on First Amendment freedoms of speech, press, and assembly and Fourth Amendment rights. This was shared by the White House Correspondents Association and won the Impact Award at the TrustLaw Pro Bono Awards.
Global platform growth and investment
The firm saw strong financial performance across the U.S., UK, Europe and the Middle East.
A&O’s strategy to expand its offering in the U.S. in areas that are critically important to clients, including energy transition, technology, life sciences and private capital, has delivered exceptional results. In the last financial year, the firm added 27 partners in the U.S., including 24 from outside the firm, and opened new offices in Silicon Valley, San Francisco and Boston, in addition to a new presence in Los Angeles announced in early 2021. The new teams performed beyond expectations, with the U.S. as a whole contributing 50% of firm revenue growth for the year.
In Europe, growth was driven by an increase in client demand for pan-European work.
The firm invested further in South Africa, hiring five new partners across banking, project finance and M&A. Their arrival further boosts A&O’s diversified offering in Sub-Saharan Africa and is producing returns.
Increased adoption of legal technology
The firm’s Advanced Delivery & Solutions offering continued to grow, with a revenue increase of 14% in the year, driven by aosphere, A&O Consulting and Peerpoint, A&O’s flexible resourcing business. Last year also saw an increasing proportion of lawyers using legaltech tools and advanced delivery methods. Developments include the launch of a new Advanced Delivery & Solutions hub in Perth to support the APAC business and the expansion of Peerpoint into the U.S. and UAE. A&O Consulting was appointed to the UK FCA Bank of England’s Skilled Person Panel and the Markets Innovation Group launched ContractMatrix, an end-to-end solution for scalable document digitisation.
Progress on environmental sustainability
Being a responsible business is integral to A&O’s strategy and in the last financial year the firm continued to demonstrate its environmental sustainability commitment, in particular through addressing its direct and indirect CO2 emissions. In May 2021 the firm announced new, ambitious Science Based Targets to reduce annual global emissions by 50% by 2030. The firm has also committed to relocating its London team, its largest office, to a new environmentally-friendly building. This will contribute to an estimated 80% reduction in annual London office carbon emissions.
A responsible global employer
A&O aims to ensure its working environment is one where all its people feel valued and individual needs are recognised. Last year this included providing access to mental health support for all staff, including one-to-one counselling and building the network of mental health allies within the firm. This now covers 14 offices and 200 allies globally.
Diversity, equity and inclusion remains a priority and in March 2022 the firm set new gender diversity targets, having met a number of targets set in 2018, to ensure that work in this area continues to bring about change. This includes a target of 50% women lawyers at every level below partner, with the firm continuing its work to ensure that more women progress through to partner candidacy to help achieve the ultimate goal of 50% women partners.
The firm also made progress on its social mobility agenda last year, launching a solicitor apprenticeship scheme. This has proved very successful, with more than 500 applicants for six places, with the new apprentices due to start in September 2022.
Helping wider communities
Last year, A&O lawyers increased pro bono and community investment work by 30% on the previous year and business teams continued to contribute a significant amount of time and skills on a pro bono basis.
In September 2021 the firm began a new charity partnership with Street Child, which works to tackle social inequalities. Fundraising has already exceeded half of the partnership’s target of GBP1 million. To date this partnership has seen 750 girls enrolled in school in Sierra Leone and provided financial grants to cover the cost of uniforms, books and school materials. Forty schools have been identified for refurbishment and training has begun for teachers to ensure that once girls are enrolled they get good quality education.
In March 2022 the firm engaged in a significant response to the Russian invasion of Ukraine, including announcing the winding down of its Moscow office and declining work not only from sanctioned entities but also those which the firm considers contrary to its professional responsibility and values.
On the ground, the Warsaw office responded to the influx of refugees from Ukraine by providing legal support through the Polish Bar and mobilising 80 lawyers across the firm’s international network to build a tool to help Ukrainians navigate their next steps outside their homeland whether within Poland or beyond. The firm has also made a significant donation to the Red Cross to support its vital work in Ukraine with those most affected by the invasion.
