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London’s top 10 firms have seen profits slide in their worst results since the deals started disappearing in 2001.

Results for 2003/04 see top London firms suffer from a 7.6% drop in average profits per partner

The Citys top 10 firms have suffered sharp falls in average partner profits, posting their worst results since the transactional downturn started in 2001.

All of the top City firms have posted a fall in partner profits, with an average drop of 7.6%, according to Legal Week research. The bulk of the elite grouping saw turnover drop slightly, with the largest rise reported by Simmons & Simmons at just 1%.

The first table of official results to be published this year sees Clifford Chance (CC), Ashurst, Allen & Overy and Linklaters among the worst hit, with the best performers treading water to keep their figures almost flat.

The average profits per partner figure for magic circle firms is now £674,000, down by 16.5% from a high of £807,000 in 2001.

The results are in stark contrast to those of the rest of the UK’s top 50 firms, which saw an average partner profits rise of over 9% and an average turnover increase of nearly 6.5%.

Management consultant Tony Williams said: “The [top 10] figures are part of a continuing trend for them. They have seen less big cross-border work, competition on pricing and have been relatively slow at addressing costs.”

Slaughter and May corporate partner Nigel Boardman told Legal Week: “Some people felt the recession was ending in the last financial year and spent money accordingly, but they were wrong.”

Leading UK firms were also hindered by the progress of US firms in London, which bagged key roles on some of the year’s biggest deals.

Shearman & Sterling and Weil Gotshal & Manges worked alongside magic circle firms on the £1.7bn sale of Canary Wharf and the £5.7bn sale of Amersham to General Electric respectively, while Sullivan & Cromwell took a lead role advising Alcan Aluminium on its £2.4bn hostile take-over bid for French rival, The Pechiney Group.

In contrast to the City top 10, the leading US firms recorded a robust set of figures for 2003, with average profits per partner rising by an average of 10%, according to Legal Week research.

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