Freshfields’ Partners Take Home Millions – But Profits Are Down
Freshfields hit a bit of a bump in the road, generating £2 billion in revenue last year but with a profit drop of 8 percent.
They ended up with about £665 million in profit before taxes, down from £725 million the year before.
Their profit margin is now just over 33 percent. That’s quite a bit lower than other big London law firms, which usually sit between 40 percent and 45 percent.
The firm’s made some changes lately. They’ve shortened their name, dropping “Bruckhaus Deringer” and they’re not sharing as much financial info as they used to, preferring not to publish results ahead of publishing financials to avoid comparisons with their Magic Circle rivals.
In the past, Freshfields’ top partners were making about £2.09 million each on average and have lead the pack in terms of pay. But now? We’re not sure. They’re not telling us anymore.
Freshfields’ revenue growth puts it in a top spot for its year-on-year performance, based on a decent transactional market where it rose one place to sixth in the 2024 global M&A adviser table, according to data from the London Stock Exchange Group.
With about 440 top partners, it’s likely their pay has gone down a bit.
A few things might explain this dip. They’re spending more on wages (up 15 percent to £1.1 billion), they might have made changes to their pension scheme, and they’re investing more in the US.
Freshfields’ competitors seem to be doing better. Linklaters reported £942 million profit (up 10 percent), Clifford Chance made £856 million profit (up 10 percent), and Allen & Overy had £892 million profit (about the same as last year).
It’s a tough time for Freshfields, but they’re still one of the top Magic Circle firms and the profit dip is unlikely to be something that sets a less-than-stellar trend for the firm.
Seeing Freshfields’ revenue hitting £2 billion yet witnessing an 8 percent profit drop is intriguing. Does anyone think this trend is a red flag for the legal industry, or is it more of a strategic pit stop for larger investments? Wondering if LawFuel Editors could shed more light on the expenses side.
wow, £2 billion in revenue but still down on profit. looks like a tough year for freshfields. must be a mix of high costs and maybe some big investments? keen to see how they bounce back.
Partners still taking home millions while profits dip, classic corporate greed. Doesn’t surprise me tbh. Wonder what the rank and file think about their ‘share’.
According to the article, Freshfields experienced an 8 percent dip in profits with a revenue of £2 billion. It’s crucial to analyze what contributed to this decline. Are we looking at increased operational costs, or perhaps strategic investments? Distilling down the core reasons would provide a clearer picture.
any idea what happened to their profit margins then? thought they were on a roll.
It’s not uncommon for firms to have a year where the revenue looks great but the profits not so much. Investments, market changes, or one-off expenses can skew things. Will be interesting to see how Freshfields adjusts moving forward.
This decline in profit despite the revenue is quite something. I’m curious if any of it is due to investing in new technologies or legal tech. That field’s been booming, and firms like Freshfields could be leading the charge with their budgets.