Clifford Chance has become the second Magic Circle firm to post encouraging 2021/22 financials, announcing today (19 July) an 8% rise in revenue to £1.969bn.
Partnership profit and profit per equity partner (PEP) were both similarly encouraging. Profit swelled by 9% to £783m, while PEP passed £2m for the first time, reaching £2.04m after a 10% increase.
At a regional level, all areas saw growth to varying degrees. APAC and the Middle East were the areas which that the biggest improvement, both posting a 14% increase in income, while Continental Europe and the Americas recorded a more modest 5%. The UK practice saw a solid 7% increase.
The figures will offer encouragement to global managing partner Charles Adams, who is still getting his feet under the table after being elected in December last year.
Adams credited his predecessor for the buoyant numbers, commenting: ‘Our team has delivered another outstanding year of results. We are seeing the positive outcome of our long-term strategic focus to diversify our client base, continually increase our market share and grow in priority geographies such as the Americas. These results are a testament to Matthew Layton’s leadership as the previous global managing partner, as well as the energy, dedication, teamwork and phenomenal expertise of all our colleagues. It is because of this that, profit per equity partner increased by 10% year on year to in excess of £2m.’
The long-term profitability figures are particular point of pride for the firm. Partnership profit has jumped by 74% since 2015, while PEP has spiked by 82%. Over the same period, revenues have increased by 42%. Chief financial officer Patrick Glydon expanded on the strategy that has seen long-term improvements in profitability, stating: ‘During Covid we adopted a very clear focus on discretionary cost management as well as staying very close to our clients. And we’ve continued maintaining that discipline. That’s been the key driver of that margin improvement.’
Looking to the future, a pragmatic Adams emphasised a need for vigilance: ‘As we observe the evolving geopolitics in a number of regions, the appalling Russian military aggression in Ukraine, as well as the global economic headwinds linked with the impact of inflation and supply chain fragility, it is critical we remain agile and ready to embrace change as well as act when needed.’
The financials come as the firm settles down following a shake-up of senior roles. Last week, Sarah Jones was promoted to global head of corporate, having previously led the corporate group in the Americas, while Emma Matebalavu became sole head of global financial markets. Steve Jacoby was also appointed regional managing partner for Continental Europe.
The re-shuffle also included the creation of two new leadership roles. Singapore projects specialist Nicholas Wong was appointed clients, markets and products partner and Jessica Littlewood has taken up a position as global operations and business transformation partner alongside her existing role as head of the European CLO practice.
The latest results make interesting reading when compared to those unveiled by Magic Circle peer Allen & Overy last week. CC was not quite able to match A&O’s revenue growth, which came in at 10%, though A&O’s overall revenue was a hair lower than its rival at £1.94bn. Both firms recorded a 9% profit rise, though A&O has the edge in absolute terms, reaching £900m.
Where CC was able to stride out in front is in the PEP figures. A&O could not match its rate of growth, posting a slower 3% rise to £1.95m.