Clifford Chance PEP breaks £2m as revenue grows 8% to £1.97bn
UK firm closes FY22 with £376m in cash and growth across all regions and practice areas
Profit per equity partner (PEP) at Clifford Chance has exceeded £2m for the first time against 8% revenue growth to £1.97bn, making it the latest UK firm to post a strong set of results as financial reporting season gets underway.
PEP grew 10% in the year to 30 April 2022, reaching £2.04m. Over the same period the firm’s partnership profit rose 9%, hitting £783m.
The firm also closed the financial year with £376m in cash and no net borrowings, which it chalked up to a combination of strong revenues, careful cost management and push for better financial and commercial discipline.
The results mark the seventh consecutive year of profit and revenue growth for the firm, which said that since the introduction of a new strategy in 2015 its revenue had increased by 46% and PEP by 82%.
Clifford Chance Three-Year View
|Year||Revenue (£m)||Percentage Change||PEP (£K)||Percentage Change|
Charles Adams, who took over as CC global managing partner earlier this year from Matthew Layton, said the firm was seeing the positive outcome of its long-term strategy to diversify its client base, continually increase its market share and grow in priority geographies such as the Americas.
“We continue to prioritise our relationships with clients and the delivery of our balanced combination of expertise and our increasingly global focus. Despite geopolitical uncertainty and signs of a slowdown in some markets, all our regions grew in income and net profit," he said.
By some margin the UK and Continental Europe regions made the biggest contribution to global revenue, pulling in 35% (£687m) and 32% (£622m) of the total respectively, well ahead of third-placed Asia Pacific, which brought in 17% (£344m). The Americas contributed 7% (£259m).
The £57m in revenue the firm earned across the Middle East during FY22 represented a 14% rise on the previous year, the highest in terms of percentage increase. That was matched by the Asia Pacific region. The UK arm grew revenue by 7%, while Continental Europe and the Americas both saw 5% growth.
The firm did not give a breakdown by practice area, but said it had grown across all of its practices and the ‘significant peaks in activity levels’ of its corporate advisory and global financial markets teams had contributed to overall growth.
The results mean that Clifford Chance’s PEP has overtaken that of UK Magic Circle rival Allen & Overy (A&O) this year, although A&O continues to close in on CC in terms of revenue.
|The UK Magic Circle 2022 Performance*||Rev (£m)||% Change||PEP (£k)||% Change|
|Allen & Overy||1,940||10%||1,950k||3%|
*Linklaters is yet to post its results; Slaughter and May doesn't publish its results
Over the past year CC has made 17 lateral partner hires across its markets and practice areas with a focus on its financial investors offering, the revenue of which the firm said had almost doubled over the past seven years. Among the new arrivals was funds lawyer Vadim Avdeychik, who joined the firm in New York in June as it sought to grow its North American coverage.
Around the same time the firm added funds lawyer Ildefonso Alier as a partner in Madrid from King & Wood Mallesons and funds and investment management partner Liyong Xing in Hong Kong from Kirkland & Ellis.
CC has made progress on its inclusion targets over the past year, including meeting targets for gender and ethnicity, which it said were comfortably passed in the UK and US.
In April the firm unveiled its ‘most diverse ever’ set of partner promotions, with women making up 41% of the 37 lawyers to get the nod in a round that saw the firm nudge closer to its target of at least 40% female partners in the firm by 2030.
The firm said that it has exceeded its goal to have 5% of its UK partners identify as LGBT three years ahead of schedule and has also exceeded its targets on ethnic minority partners.
The firm pointed to supporting the wellbeing of its people as a continued priority and launched its People and Talent Strategy this year, focused on hiring top talent globally, supporting the career progression of its people and ensuring fair and competitive reward programmes.
In support of this the firm hired consultant Charles Alberts from insurance giant Aon in June as its first global head of wellbeing and employee experience, with Alberts expected to create and lead the firm’s first wellbeing strategy.
While Adams identified the Americas as a priority, A&O stands out when compared to CC due to a series of eye-catching strategic moves stateside which has seen it open three new offices in Silicon Valley, San Francisco and Boston over the last 12 months.
A&O said 50% of the revenue growth it achieved in 21/22 was down to an ‘exceptional’ performance in the US.
|The UK Magic Circle 2021 Performance||Rev (£m)||% Change||PEP (£k)||% Change|
|Allen & Overy||1,770||5%||1,900k||17%|
|Freshfields Bruckhaus Deringer||1,590||5%||1,910k||5%|