10:34, July 04 104 0

2017-07-04 10:34:10
Clydes revenue up 14 per cent while PEP slips to £650k

Clyde & Co’s revenue has grown by 14 per cent to £508m while net profit increased by 9 per cent to £127.6m, the firm’s latest financial results show.

This revenue jump is bigger than that of 2015/16, when the firm’s turnover stood at £447.3m having grown by 13.1 per cent on the previous year.

Average profit per equity partner (PEP) decreased from £665,000, which was a record-high for the firm, to £650,000. The firm attributed the drop to the fact that it had increased partner numbers to 397, up by 40 on the previous year.

It added that currency fluctuation accounted for 5 per cent of the total revenue growth figure (£25.4m).

Clydes’ merger in Scotland with Simpson Marwick in 2015 accounted for about £10m of the firm’s revenue last year. So far, the merger has generated about £20m for the firm across the two financial years since the merger.

Clydes global chief executive officer Peter Hasson told The Lawyer: “Its a bit déjà vu for us because we are typically providing this revenue increase year on year. We actually could have perhaps have pushed it on a bit more.

“The impact on hours has been the fall of the value of pound, which has inflated figures for any firm with an international business. The key is that we have achieved growth in all of our regions, with revenue up £61m for firm as a whole, and international non-UK business grew by 25 per cent.

“We’re getting close to a 50/50 split between the UK and our international business, which is a pleasing feature. The results show the benefits that come from having a good balance in geographic and group practice diversity, and that a good spread of broad business is an important factor in producing results.”

Clydes global senior partner Simon Konsta added: “To have achieved double-digit headline growth again this year is pleasing and is testament to the hard work of our people and the support of our clients. Looking forward though, we know that the global landscape for business today is more complex than it has been for a long time. When it comes to doing business globally our clients are facing an array of new challenges and risks. It is our job to ensure that we continue to deliver the support and services that they need to help them succeed and that is the task on which we are focused.”

The figures mean that compound average annual revenue growth over the last five years for the firm stands at 12 per cent per annum.

The firm has been in expansion mode, adding five new offices in the United States, Europe and Latin America. Three of those offices are in Miami, Chicago and Washington DC; one is in Dusseldorf and the other is in Mexico City, announced in May 2017 and pending regulatory approval.

Hasson said the firm was looking at increasing the strength and depth of its offices in the US, with a special focus on litigation. Hasson added that competitive insurance was a key area, and that product liability was proving to be a strong practice area in Miami.

The firm said it could see the importance of “increasing our presence in continental Europe to lessen the effect of Brexit”, which was largely being serviced by the firm’s Dusseldorf office.

“Heavy amounts of work” were coming to the firm in Asia, especially from the traditional clientbase of insurers. “Asia shows the full mix of what we have done,” Hasson said.

“Our focus is to make sure we are in all of the places in major markets where our clients require us to be,” Hasson said. He added that clients were adding pressure on firms to carry out their work more efficiently, which often requires a regional operation to service clients at pay point.

The firm is also looking to grow its marine business internationally.  Last month, Clyde & Co took on the entire marine team of Eversheds Sutherland in Newcastle.

Norton Rose Fulbright TMT partner Dino Wilkinson also joined Clyde and Co to boost the firm’s Abu Dhabi office.

Hasson emphasised that the firm was making moves to deliver greater efficiency to clients by investing in IT support. It has just created a global innovation board which will look at enabling change in the business, identifying new forms of value from data and evolving the range of services supplied to clients. There have been continued investments in practice management and workflow systems to improve efficiency.