Clyde & Co has notched up its 22nd consecutive year of revenue growth, the firm’s latest financial results show, albeit with a slower turnover increase than the previous financial year and a modest dip in profit following internal investments.
Firmwide revenues were up 3% from £611m to £627m in 2019/20, a decrease on last year’s pacier 11% growth rate. Despite the reliable revenue growth, profit at the firm fell 5% to £143m ‘due to increased investment,’ while profit per equity partner (PEP) likewise dipped 4% to £665,000.
‘I’m really pleased, we’ve produced solid numbers after a period of consolidation,’ senior partner Peter Hirst (pictured) told Legal Business. ‘I was elected on a manifesto of consolidation and investment and we’ve done just that. We had a remarkable period of growth, but we needed our infrastructure to keep up with us.
‘We were not long ago what I would call a challenger firm, but I really wanted to invest in IT and infrastructure to match where we are now as an established firm. When I was elected, I said to partners: “We need to invest, there will be a drop in profits, but it has to happen.”’
The firm also continued its ambition to generate the lion’s share of its revenue outside the UK, with 53% of turnover produced overseas. North America’s material output stood at 22%, while the Middle East and Africa contributed 13% and the Asia Pacific 12%. Europe and Latin America accounted for 4% and 2% respectively.
Due to the firm’s geographic spread, the economic impact of Covid-19 has been a persistent disruption. Said Hirst: ‘In January and February, from actions in our Asia offices we knew it was big and it was serious. We acted for clients throughout SARS and MERS so we had a bit of a playbook for Covid, but no one anticipated what it would become. But our clients fled to us in their moment of need.’
In recent years Clydes has garnered a reputation as one of the industry’s more upwardly-mobile firms, in no small part due to its steady and consistent management. However, the firm received a jolt last year when senior partner Simon Konsta abruptly stood down. Hirst was later confirmed as his replacement, while Clydes also appointed Matthew Kelsall as chief executive officer and Dame Inga Beale and Stephen Chipman as non-executive directors.
Hirst has now been in the role a year, and is preparing the firm for a tricky 12 months ahead: ‘We’re planning for the worst and hoping for the best. We have to plan for the worst in some areas. Real estate is the case in point; but we’ve actually seen an uptick in some real estate work. You cannot be lazy and just say it will impact real estate and aviation and things like that. Being sector–based and global makes us better placed than most. We’re stable and consolidated.’