Legal Business Blogs

‘Year of two halves’: Coronavirus takes gloss off financials for OC as revenue lifts 5% and profit drops

Osborne Clarke’s latest financial results have proven to be a mixed bag as it recorded a 5% uptick in international revenue to €318m even as profit fell amid a year of investment.

Nevertheless, the revenue uplift from last year’s €304m is a positive showing and stands out as a 63% increase over five years. 

OC’s performance in the UK was more subdued, with revenue rising 3% to £155m from £150m in 2018/19 and UK net profit diminished by 5% to £59.8m from £63m last year. UK profit per equity partner (PEP) also took a hit, down 12% to £614,000 from £703,000, with ‘significant investments in both its people and infrastructure’ and ‘partner investments’, cited as the reasons for these respective reductions.

International CEO Simon Beswick told Legal Business that he was pleased with the results from an global perspective. ‘We traded really well until lockdown kicked in, with the Asia business trading well until the end of 2019. After that, it pretty immediately felt the impact. Europe traded well until mid-March and, from the end of May, things started to pick up again.

‘The US offices have been trying to originate US clients for work in Europe and Asia and since they are largely tech-related clients, things have continued to flow pretty well. If we’d stopped the clock at the end of February, many of the offices would have had double-digit growth, but March took the gloss off it.’

Managing partner, Ray Berg (pictured), said it was a similar picture for the UK business. ‘We had been going great guns, but it’s been a year of two halves, where the second half lasted two months but felt like two years!’

Berg noted that the firm continued to attract new mandates and clients, adding that he was particularly pleased with how people have pulled together in what he described as ’first and foremost a health crisis’.

He pointed to investment over the last few years in ‘connected working’, which has enabled people to work from home on a mandatory basis as well as a voluntary one. ‘Our clients have commented on the quality of the services we’ve delivered in lockdown, which has proved that it was an investment worth making.’

In the UK, the firm’s disputes and risk business saw 15% growth while projects, real estate and finance grew 2%.  Growth in advisory and business transactions remained flat while financial services grew 10% and OC’s largest sector group – tech, media & comms – saw a 6% uplift.

Client demand was generally strong pre-lockdown and that since, the Asia offices have been hit hardest, with continental European offices faring better, with some enjoying strong double-digit growth.

OC made 11 senior promotions during the year in Germany, Italy and the UK, with Singapore recently benefiting from two new counsel: litigator Yvette Anthony and corporate specialist Simon Huang.

The firm has not reduced its UK trainee intake for September and has kept its summer vacation scheme in place. It also flagged the addition of Bola Gibson, its new head of inclusion and corporate responsibility in the UK, as well as its sponsorship of the European Network for Women in Leadership. Twenty female partners from across its UK and EU offices are participating in the programme.

Beswick and Berg remain sanguine about the months ahead, noting that clients have moved from the coronavirus crisis management phase to thinking about longer-term projects, and identifying opportunities in accelerating digitalisation, as well as advising clients on reaching decarbonisation targets.

Concluded Beswick: ‘There are opportunities for us there, with the caveat of whether we have a second wave [of the pandemic]. At some point soon, we’ll all be returning to talking about Brexit!’