Freshfields Bruckhaus Deringer was the only magic circle firm to see profits per equity partner (PEP) fall during 2010-11, with PEP dipping by to £1.308m, down from £1.406m, while revenue stayed broadly static at £1.14bn.

Despite the drop in profits, the firm remains second only to Slaughter and May as the most profitable firm in the UK top 50 and has also seen greater PEP growth over the last five years.

Freshfields attributed the dip in PEP during 2010-11 to continued investment in the US, with the firm moving its New York operations into larger premises in September 2010, as well as ongoing costs incurred by its new US litigation practice, to which the firm has added eight partners over the last two years.

Freshfields managing partner Ted Burke said: "We were well-positioned for the downturn and that has enabled us to make some significant investments while keeping a strong performance.  We have built an outstanding US litigation practice from scratch over the last couple of years and we have also made a number of strategic partner hires this year, in high-yield, debt capital markets and other areas."  

Other lateral hires for the firm during 2010-11 have included high-profile names such as City finance partner Alan Rae Smith and Dubai corporate partner Pervez Akhtar, who both joined from Allen & Overy.

Burke added: "We have invested a lot in our people by developing a best-in-class learning and development programme and by raising salaries, and we've continued to invest in our infrastructure through our IT server consolidation project. These sorts of investments don't necessarily translate into immediate profits, but they all help to position us very well for the future."

For more, see: