The Brief:
A&O Shearman’s profits jump 14% to US$1.6bn while revenue barely budges.
The firm’s shrinking partnership means bigger paydays, with PEP up 12% to US$2.9m.
A&O Shearman’s revenue didn’t move much this year. But its partner pay did.
Two years on from the mega-merger of Allen & Overy and Shearman & Sterling, the firm’s FY26 results tell a simple story. Fewer partners, higher-value work, bigger payouts.
The headline numbers:
Pre-tax profits rose 14% to US$1.6bn (A$2.3bn)
PEP climbed 12% to US$2.9m (A$4.2m)
Revenue stayed flat at US$3.7bn (A$5.3bn), matching the US$3.7bn posted last year
So, how is profit per equity partner jumping when revenue isn’t?
Fewer partners splitting the pie. The partnership shrank from 740 to 710 over the year, continuing a decline that started back in September 2024, when the firm said it would cut 10% of the combined equity partnership.
But it’s not just headcount doing the work. The firm says it’s also chasing better quality mandates.
Revenue mix continued to shift toward complex, cross-border matters where the firm’s proposition is most relevant—transformational transactions and financings, major disputes, emerging regulatory issues, and AI-enabled services—increasing profitability.
That strategy resulted in some serious mandates this year:
Advising biotech Genmab on its US$8bn acquisition of Merus
Securing a settlement for UBS, ending a 14-year litigation in France
Representing Reflex Media and Clover8 Investments in a major trademark infringement jury trial win against SuccessfulMatch.com.
Global managing partner Hervé Ekué said:
“These results show our strategy taking hold. Clients are entrusting us with more of their most important and complex mandates. Combined with the way we have streamlined our operation, our profitability has grown significantly.”
Source: A&O Shearman