Allen & Overy (A&O) has boosted turnover by 7% while also increasing total profits, in what will be seen as a solid financial performance for the firm during a tough trading year.

The magic circle firm saw turnover grow to £1.12bn in 2010-11, up from £1.05bn in 2009-10, with total profits rising 6% to £455.8m.

Profits per equity partner (PEP) remained stable at last year's figure of £1.1m due to average equity partner numbers rising 12% over the year from 355 to 398.

A&O said that roughly half of the turnover rise had come as a result of expansion through new offices and lateral hires, while the other half was generated by growth in its existing offices, with Asia performing especially strongly.

The firm said it was pleased with the results in a year during which it had made significant investment, including around half of the costs of the launch of its new Belfast support centre.

A&O opened for business in Northern Ireland last week in temporary offices, with 40 staff having already started working out of a total of 110 set to be recruited. The resulting London back office redundancy consultations have now concluded, with 153 support staff set to be laid off in three tranches over the course of the financial year.

A&O also opened a new office in Jakarta during 2010-11 and launched in Australia and Qatar towards the end of the previous financial year. Seventeen new partners joined in Australia during the last financial year along with 16 in other offices, including Paris and Frankfurt.

The firm's busiest practice areas were banking and litigation, while the firm saw a slowdown in M&A. The results come after the firm last year posted a 4% turnover dip alongside a 10% increase in PEP after reducing equity partner numbers by 5%.

A&O managing partner Wim Dejonghe (pictured) commented: "We are quite pleased with the result. We see 2010-11 as a year of investment where we have taken quite a large number of lateral partners and invested in new offices. We have also invested in our future efficiency through the Belfast office."

"Our investments should be paying off this year, so we have a positive outlook although there are still uncertainties in the market. What we can see is that our strategy really works, as we continue to collect a larger share of our turnover from cross-border work year on year."

The firm's lockstep runs from 20 to 50 equity points, rising by two points per year. This year, partner compensation ranges from £642,000 for those with 20 points to £1.604m for plateau partners. Last year's corresponding range was £661,000-£1.652m.

The financial results come after magic circle rival Clifford Chance yesterday (5 July) announced that its 2010-11 revenues had risen by 2% to £1.22bn, while PEP grew 8% to pass the £1m mark.