Clifford Chance sees 9% jump in PEP to £1.85m
Magic Circle heavyweight hails sixth consecutive year of growth as revenue reaches £1.83bn
Clifford Chance has added to the City’s crop of bumper financial results, posting a 9% increase in its profit per equity partner (PEP) and a 1% rise in revenue to £1.83bn in the financial year ending 30 April.
While revenue growth dipped from last year’s 6% increase, the firm’s PEP figure jumped to £1.85m, up from 2020 when it rose 5% to hit £1.69m. There was an 8% uptick in partnership profit, rising to £716m from £666m.
Its growth figures put it behind Magic Circle rival Allen & Overy, which posted a 5% increase in revenue to £1.77bn against a 17% jump in PEP, while profit before tax jumped by 19% to reach £822m.
Despite the lower percentage uptick in revenue for FY21, metrics showed strong financial performances over the past six years, with revenues increasing by 35% during that time, while PEP increased by 65%.
The regional breakdown of the results showed a robust 9% jump in revenue for the firm’s UK business, but results from the rest of its international platform were more varied. Continental Europe was up by 2% in local currency terms, while the Americas and Asia Pacific were down by 2% and 5%, respectively, marking a reversal from last year when the Americans accounted for 15% of the firm’s revenues for 2020. The Middle East, meanwhile, recorded a 6% drop in revenue, with business in the region accounting for just 3% of the firm’s total revenues for the year.
Matthew Layton, global managing partner of Clifford Chance, said: "Despite many challenges, this has been a year of progress: we have maintained our momentum in advancing our strategic priorities and in investing for the firm's longer-term future in line with our vision. We have also begun important work to map out how we will operate in the new world as communities and economies start to emerge from the shadow of the pandemic.”
Layton said the firm’s global transactional practices, namely its restructuring, insolvency, corporate, M&A and antitrust teams, all experienced peaks in activity as they moved to match evolving client needs during various stages of the pandemic.
He also flagged the firm’s work to adapt to accelerated levels of digitalisation in the legal industry, noting that its tech teams “have been in great demand with revenues jumping over 16% year on year as clients have sought informed advice that combines deep digital, data, IP and cyber knowledge with sector insight and broad-based legal and regulatory capability.”
Despite a challenging opening to the financial year as a result of pandemic-related uncertainties, the firm’s revenue and profit performance for the year were buoyed by a record final quarter that will propel it into the new financial year, representing the reviving demand as the world returned to business after the earlier stages of Covid-related upheaval.
Looking ahead, Layton said he expects activity to remain high for the firm’s transactional practices and predicted a spike in activity for its litigation and dispute resolution teams, as courts and regulators start to resume normal operations and businesses weigh the wider impacts of the pandemic.
Recent developments at the firm include the founding of its environmental, social and governance task force led by senior partner Jeroen Ouwehand back in November, as well as its establishment of a research and development hub dedicated to accelerating the development of digital products for its employees and clients.
In April, the firm also delivered on its diversity and inclusion targets by promoting its highest number of female lawyers ever to the partnership, elevating 11 women as part of the 29-strong round. At the time, it reported that 20% of the new US and UK partners who have disclosed ethnicity identified as non-white, exceeding the firm’s target of 15% minority ethnic in the US and UK by 2025.