Last week Freshfields Bruckhaus Deringer became the latest U.K. firm to unveil spectacular results for the financial year ending April 30, with a 25 percent increase in profits per equity partner the undoubted highlight. The firm’s PPP now stands at just more than $2 million (�1.036 million), up from $1.5 million last year; and revenues grew by 12 percent to $1.95 billion (�987 million).

Freshfields’ results are the latest indication that the five Magic Circle firms are enjoying their most profitable period since the dot-com boom of the late 1990s. On May 26, Clifford Chance also unveiled a significant hike in profits, a 25 percent increase to just more than $2 million, while revenues jumped 16 percent to $2.4 billion. Both firms are reaping the benefits of the booming global mergers and acquisitions market with both public companies and private equity houses in a buying mood.”It’s been a fantastic year. … We have been operating in a very favorable market,” Freshfields’ chief executive Ted Burke said. “We’ve experienced growth across the board in all practice groups and every office, which I don’t think we’ve seen before.”Freshfields underwent a significant restructuring in the last year that reduced the size of the firm’s equity partnership as well as overall head count at the firm. The average number of equity partners last year was 474, down from around 520 the year before. The number of equity partners is expected to fall further, leaving the firm with an equity partnership in the low 400s. Freshfields has also begun to introduce nonequity partners in less profitable regions, such as China, and expects to appoint up to 20 partners without equity shares.Although the drop in equity partners played some role in boosting PPP, Burke said that the full effect of the reductions will not be seen until next year. In addition, the restructuring itself depressed profits slightly. It reportedly cost around �50 million, most of which the firm has now paid for.As well as weeding out poor performers, Freshfields has seen a number of senior partners depart or become consultants in order to keep hold of favorable pension arrangements. Until overhauling its retirement plan last year, Freshfields was the only leading U.K. practice with an unfunded pension plan paid for out of the firm’s profits.Burke emphasized that despite the restructuring of the business, revenues still grew. “There was a lot of internal focus last year, but we still managed to grow turnover by 12 percent,” he said.