The only firm among London’s big four to have retained its position in the Legal Business 100 table, Clifford Chance (CC) is the second-largest UK-bred shop after DLA Piper, having added £83m to its top line to hit £1.623bn.
But if the 5% uptick in revenue is broadly comparable to Linklaters, Allen & Overy and Freshfields Bruckhaus Deringer, it is the 16% surge in profit per equity partner (PEP) to £1.6m where CC has edged ahead of its rivals.
A combination of a 13% rise in its profit pool to £626m and a slight dip in the number of equity partners from 403 to 392, means CC has been replaced by Linklaters as the firm with the lowest PEP in its peer group – a significant result at a time when pressure for talent from more profitable US players is increasing by the day.
Re-elected to the role for a second term in December last year, managing partner Matthew Layton (pictured) can look with some satisfaction at the three years since the launch of his global strategy in 2015.
Layton repeatedly points to the growth of the Americas practice, which is now generating £214m or 13% of the firm’s revenue. Asia-Pacific, also among the priorities in Layton’s strategy, is bringing in £280m, although the UK and continental Europe remain by far the largest generators at £540m and £535m respectively.
The 400-strong tech group is also a highlight, according to Layton. ‘We have a very strong client base in the tech sector,’ he says, pointing to groups such as Oracle and mandates like acting for the underwriters on China Literature’s $1.1bn initial public offering. CC also advised Unilever on the $2.7bn acquisition of Seoul-based cosmetics maker Carver Korea and Spanish bank BBVA on the €5bn disposal of its real estate business to Cerberus Capital Management.
The year also marked a milestone in Layton’s drive towards improving efficiency, with the firm acquiring the former office of Carillion Advice Services in Newcastle as its first nearshoring low-cost centre in February.
‘I don’t see a need to materially shift our strategy. Continued growth in the US is a top priority.’
Matthew Layton, Clifford Chance
What’s your general take on the firm’s financial performance?
Matthew Layton: It’s good to see top-line growth in all regions and practice areas, and a strong performance in profitability. The most important thing was building the three-year trajectory since we introduced the new strategy. Revenue went up 20% over that period of time; PEP rose 43%. That reflects the type of work we are doing and the value we contribute to the clients. We have also seen a very strong performance in the US and Asia-Pacific – long-term priorities – both growing 37% over the last three years.
What are you most proud of?
Layton: It is very rewarding to see all the investment we have put into the US team pay back. We now have 75 partners and nearly 300 lawyers in the Americas. About 80% of the practice is US domestic – very strong in a number of areas including real estate investment trusts, insurance, investigations, project finance and structured products. Latin America had particularly strong growth over the last three years. And there is a good flow of work out of the US to the other regions across all practice areas. The other very positive area has been how the tech group has very rapidly grown and supported the development of our relationship with all clients across all sectors.
You mentioned the firm’s strategy introduced in 2015. What are its key pillars?
Layton: It’s about making sure we are really focused on the clients our capabilities can add value to. It’s about bringing the firm together around those client relationships. It’s around the culture that we create within the firm – we need to be able to attract and retain the best people, and create an environment which is inclusive and diverse. And it’s about making sure that we are working to the highest operational standards, improving the skills and resources within the team.
What are your goals for your second term?
Layton: I don’t see a need to materially shift our strategy. Continued growth in the US is a top priority. Growth of the business in Asia-Pacific is very important: the One Belt, One Road initiative is creating a lot of opportunities. Unlike some firms, we see continued investment in continental Europe as also important. Our clients have to operate on a global basis; we need to have the capability to support them right across the globe.