10:10, July 05 92 0

2017-07-05 10:10:08
Clifford Chance tops magic circle growth with 11% revenue boost to £1.54bn

Clifford Chance has posted turnover growth of 11 per cent, the highest of its peer group, as turnover passed the £1.5bn mark for the first time.

The firm saw turnover rise from £1.38bn to £1.54bn in 2016/17, while also showing 23 per cent increases in both profit per equity partner (PEP) and profit since the 2014/15 financial year. Two years ago, PEP and profit stood at £1.12m at £450m.

In 2016/17, PEP rose from £1.23m to £1.375m while profit grew from £494m to £554m.

As with all magic circle firms, Clifford Chance’s figures differ slightly owing to fluctuating global currencies and, when adjusted, show just a two per cent growth in turnover from the previous year with 8.5 per cent increases in profit and PEP over the same two-year period.

Despite geopolitical factors and currency fluctuation causing a minor hiccup in the firm’s business in summer 2016, it still saw growth of 4 per cent in London with Clifford Chance managing partner Matthew Layton admitting that he had expected the office to show static results.

Continued investment in technology is a particular focus for the firm.

The firm’s internal contracts app CC dr@ft, developed in the firm’s Amsterdam office, has paid significant dividends. The in-house software, designed to do large volumes of document drafting, has grown to over 4,000 licensed users and generated a seven-figure income for the firm in the last year.

Its work with Neota Logic has Clifford Chance work on an application for the Over The Counter (OTC) derivatives market and the development of a toolkit to address the impacts of the MiFID2 regulation ahead of the January 2018 deadline.

Clifford Chance is the third magic circle firm to post its results after Linklaters broke the £1.5m PEP barrier for the first time, while Freshfields posted largely static results.

Particular highlights in the last 12 months for Clifford Chance included advising on China Investment Corporation’s €12.3bn purchase of Logicor and CIC Capital & Macquarie’s £13.8bn acquisition of the National Grid’s gas business.

Layton was eager to illustrate the importance of the firm’s client-driven strategy as a key reason of its success. Layton was elected into the role in 2014 and introduced this new strategy a year later.

Layton said: “Every business should be saying they’re client-driven. Here, it’s part of the culture and ethos of the firm as well as the client. Technical expertise are critical but the delivery of our work is changing. Everything that we do is personalised, bespoke and tailored to each individual client.”

Continental Europe, particularly Germany, Paris, Spain and Italy were said to have had good years in what Layton described as the “general risk environment” while the firm recorded strong turnover growth in the Americas and Asia Pacific regions, rising 30 and 35 per cent respectively over the last two financial years.

While the results show impressive financial growth, they have come in a year of structural change as office closures and financial review have seen significant alterations to the firm.

It announced an end to its association in Jakarta and a winding down of operations in Bangkok as its Singapore office, which will absorb some of the Bangkok-based partners, becomes a growing hub for the area joined closures in Qatar and Saudi Arabia.

Nine new partners joined the firm with a noteworthy strengthening of its New York office with hires from Greenberg Traurig and Duane Morris.

Finally, partners voted for an increase at the top-end of its lock-step but a cut back on the Perth office with some partner’s points dipping as low as 29.

Layton said that all hires had been within the firm’s “internal budget objectives”.

Over the two-year strategic period Layton saying the firm’s office closures weren’t “contradictory” but that Clifford Chance was eager to reflect the needs of its clients.

Layton said: “We don’t feel that there’s a need to plant a flag in every country. This falls within our investment strategy and our operations in Kuwait, Iran, Oman, Egypt and Jordan are all good examples.

“We’re scaling up our operations in Dubai as well as a growing African influence, which is supplemented by our work in London. Asia Pacific is very important to us, it saw our highest growth in revenue. We’ve seen Peter Charlton handing over to Geraint Hughes who’s overseen five years of strong growth there.”

Layton said that there were no plans to “plug the gaps” in the United States and stressed that he didn’t want to “stretch the firm’s bandwidth”. Only if there was genuine client need would the firm look to opening new offices in the US.

This year is also the 10th anniversary of Clifford Chance’s operational centre for excellence in Gurgaon, India, which houses 17 per cent of the firm’s business services staff globally which houses around 50 to 60 legal consultants.