Clifford Chance pushes revenue past £2bn as PEP holds steady
UK firm matches Magic Circle rival Allen & Overy in meeting revenue landmark as PEP remains at £2m
Clifford Chance (CC) grew revenue 5% in FY23 to exceed £2bn for the first time as profit per equity partner (PEP) held steady.
Revenue at the firm reached £2.06bn in the year ended 30 April, while PEP fell slightly from £2.04m last year to £2.0m, and partnership profit dipped from £783m to £781m.
The results see the firm join the £2bn revenue club alongside Magic Circle rival Allen & Overy (A&O), which grew its topline 7% in the year ahead of its planned merger with Shearman & Sterling to £2.1bn.
However they also mark an end to the unbroken streak of revenue and profit growth the firm had enjoyed since the introduction of a new strategy in 2015, underscoring the challenging market conditions law firms and their clients are facing globally. A number of UK firms to have published their results so far reported revenue growth but flat or reduced PEP, including A&O, which saw PEP fall 6.7% to £1.82m.
CC’s global managing partner, Charles Adams, was upbeat about the firm’s performance, saying the firm had “delivered another strong set of results amid continued significant geopolitical and economic headwinds.”
He added: “Despite a year of subdued M&A activity across the industry, our transactional teams maintained positive momentum buoyed in part by an active tech sector and private capital fund raising. Demand for our global advisory expertise was robust. We experienced significant growth in our global litigation and disputes resolution practice as well as our regulatory investigations business.”
The firm didn’t give a precise breakdown by region or practice area but said that its global litigation and dispute resolution practice had been the biggest contributor of revenue growth, driven by “client focus on value protection and recovery, geopolitical disruption and a post-Covid revival in enforcement activity by regulators and criminal prosecution agencies.” It also pointed to its tax, pensions and employment teams as areas of strong revenue growth.
In terms of region, CC underscored its commitment to growing in the US, where 10 of the 24 partners the firm hired in FY23 are based, including insurance and regulatory partner Frank Monaco, who joined in New York from Mayer Brown. The firm also added seven partners from rivals including Latham & Watkins in May to launch an office in Houston focused on energy work.
The firm said its client base reflects its strategy of growth: its financial investors and corporate enterprise client groups together account for more than 70% of its total global revenues. Standout work for the firm in FY23 included advising the 15 banks involved in Porsche’s €78bn initial public offering, one of Europe’s largest ever listings.
Alongside lateral partner hires CC also promoted 32 lawyers to partner in April in a round that, with 12 women, nudged the firm closer to its goal to have 40% women partners globally by 2030. The round was also diverse in terms of ethnicity, with 38.5% of the 14 new US and UK partners that disclosed ethnicity identifying as under-represented minority ethnic, a result that saw the firm exceed its target of 15% for the third year running.
Adams said CC had begun the new financial year “with maintained growth momentum and a strategy focused on growth in geographies and sectors that matter most to our clients.”
He added: “Against the current backdrop of persisting challenges and uncertainties in the global economy, we will continue the implementation of this strategy to ensure we deliver outstanding service for our clients globally."