Legal Business Blogs

Clifford Chance underperforms Magic Circle with 9% drop in PEP

Clifford Chance (CC) has underperformed its Magic Circle rivals in its 2012/13 results as the firm today announced a 2.5% decline in revenue to £1,271m and a 9% drop in profit per equity partner (PEP) to £1m.

The firm, which has expanded the number of equity partners year-on-year from 379 in 2010-11 to 411 in the past financial year, pointed to factors including the predicted Eurozone crisis together with a slowdown in the Asia-Pacific market and a change of political leadership in China as having a negative impact on its bottom line.

Managing partner David Childs said: ‘We are living through an extended period of choppy conditions in global markets. However, our continued investment across geographies and practices have given us a broad-based business with the resilience to weather this volatility, as shown by our results over recent years as well as the major mandates and awards that we have been proud to win.’

Last year CC posted a 7% increase in revenue to $2,048m and 12% increase in PEP to $1.66m, as reflected in Legal Business Global 100 for 2011-12.

The past year has seen the 3,017-lawyer global firm open an office in Seoul as well as winning approval to enter into the first ever mixed partnership arrangement with a Saudi Arabian firm, Al-Jadaan & Partners Law Firm, in March this year.

CC also entered into an alliance in Singapore with litigation boutique Cavenagh law, giving it access to the lucrative Singapore litigation market. ‘We are the first full service firm in Singapore offering litigation advice,’ said Childs.

Deals highlighted by the firm include acting for the sponsors and financial advisers on Glencore International’s acquisition of Xstrata and Anheuser-Busch InBev on the bank financing of its $20.1bn acquisition of Mexican brewer Grupo Modelo.

Childs singled out litigation and banking and finance as having a good year, commenting: ‘Our global litigation and dispute resolution practice put in another excellent performance, with roles on some of the most high-profile and complex matters around.’

But despite Clifford Chance remaining as the leading Magic Circle firm in this year’s Legal Business Global 100 in revenue terms, in fifth place behind DLA Piper, Baker & McKenzie, Laham & Watkins, and Skadden, Arps, Slate, Meagher & Flom, the firm underperformed Freshfields Bruckhaus Deringer in seventh position. Freshfields last week reported a 7.2% increase in turnover from £1.139bn to £1.22bn and PEP rose by 7.6% to £1.398m.

Linklaters, in eighth place in the Global 100 2012-13 saw its revenue drop by 1% to £1,195bn but its PEP was up by 6% to £1.260m. Allen & Overy, meanwhile, in ninth place, reported a 0.6% increase in revenue to £1.19bn and flat PEP of £1.1m for 2012/13.

Click here to see the Global 100 results