Legal Business

‘A timely reminder’: SDT issues joint highest-ever fine in anti-money laundering crackdown

The Solicitors Disciplinary Tribunal has fined Clyde & Co £500,000 and former partner Edward Mills-Webb £11,900 following a slew of anti-money laundering breaches.

At a hearing that took place last week (9-11 January), the SDT considered a statement of facts and admissions agreed by the parties, ultimately finding all allegations to be proved. The SDT ordered Clyde & Co to pay a £500,000 fine, as well as contributing to the SRA’s £128,197.48 costs. Meanwhile, Mills-Webb was ordered to pay a £11,900 fine and contribute towards the SRA’s £54,941.77 costs.

Mills-Webb resigned from Clyde & Co in 2019 and is now a consultant at marine insurance specialist Preston Turnbull.

In the admissions, Clyde & Co admitted to breaching several anti-money laundering regulations including failing to carry out adequate customer due diligence (CDD) on a client and failing to carry out adequate ongoing monitoring of this client.

Due to these failures, the firm admitted to breaching principles 6,7 and 8 of the SRA Principles 2011 as well as failing to reach outcome 7.3 and/ or 7.5 of the SRA Code of Conduct 2011.

Meanwhile, Mills-Webb admitted to materially contributing to Clyde & Co’s failure to carry out adequate CDD checks and materially contributing to Clyde & Co failing to take adequate steps to check what ongoing monitoring of the client was being carried out. He too was found to be in breach of the same SRA Principles and failing to reach the same outcomes of the SRA Code of Conduct 2011 as his former firm.

The SRA was represented at the hearing by Andrew Tabachnik KC of 39 Essex Chambers who was instructed by Ian Brook of Capsticks. Clyde & Co was represented by Ben Hubble KC and Saaman Pourghadiri of 4 New Square Chambers. Mills-Webb was represented by Helen Evans KC and William Birch of 4 New Square Chambers. They were instructed by Herbert Smith Freehills.

The £500,000 fine is the joint-highest fine ever issued by the SDT, matching the £500,000 issued against Locke Lord in 2017 after failing to properly supervise partner Jonathan Denton. Denton was involved in potentially dubious investment schemes and was struck off in April 2018.

Prior to this, the highest fine given out by the SDT in relation to money laundering offences was in 2014 when Fuglers was fined £75,000 after allowing Portsmouth FC to use its client account as a bank account.

Commenting on the fine, Legal 500 Next Generation Partner for professional discipline, Andrew Pavlovic of CM Murray, said: ‘The size of the fine is particularly significant considering the conduct was self-reported, and there was no evidence that the relevant transactions did actually facilitate money laundering or financial crime.’

‘However, there were clearly a number of risk areas associated with the work and the failure to undertake the required due diligence appears to have persisted over a number of years, notwithstanding repeat transactions,’ he added.

The high-value fine marks a display of intent from the regulator, which in recent months has drawn criticism over its perceived lack of involvement during the collapse of Axiom Ince, of an increasingly hardline approach to anti-money laundering failures.

SRA chief executive, Paul Philip, said: ‘Money laundering is not a victimless crime and firms have a key part to play in preventing legal services from being used by criminals. Firms must ensure they are paying proper attention to identifying clients and mitigating money laundering risks. This fine should be a wake-up call to any firms that are not meeting their responsibilities to have robust AML processes in place, otherwise they could be facing a similar penalty.

In a changing regulatory landscape, firms will need to double down on AML procedures or risk facing substantial fines. ‘This sets a precedent regarding the seriousness with which the SRA/SDT will assess AML failures. AML has been a consistent focus of the SRA for several years now and the size of this fine indicates the necessity of firms having robust due diligence and file opening procedures,’ Pavlovic explained.

‘Now that the SRA has the power to issue unlimited fines for failures to detect or prevent economic crime, this development serves as a timely reminder of the potential for large scale fines,’ he added.

In a statement Clyde & Co said: ‘Clyde & Co sincerely regrets any compliance failings – relating to a series of client shipping transactions that we identified in 2018 – which led to this hearing. Having reported the issue to the SRA, we fully assisted with its investigation and have sought to learn appropriate lessons.’

‘Under the firm’s current leadership, we have significantly enhanced our risk management and regulatory compliance capabilities including restructuring our in-house risk and legal functions; appointing a Head of Financial Crime; and further enhancing our processes, policies, levels of oversight and training.’

‘We hold ourselves to the highest professional and ethical standards and take responsibility for ensuring we meet them. This SDT determination is a reminder that regulatory compliance and risk management requires continuous, diligent attention. Our senior management is fully committed to ensuring firm-wide adherence.’

Legal Business

‘Testament to the enduring strength of our strategy’: Clyde & Co reports increase in revenue and profit as BLM merger beds in

Clyde & Co today (1 August) reported a 22% increase in revenue to £786.6m – a combination of 6% organic growth and the impact of its merger with BLM, which finalised last July. This marks the firm’s 25th consecutive year of growth, with revenue up 115% over the decade.

Profit was also up 6% to £169.2m, while PEP held steady at £708,000.

The firm reported higher growth in each key metric than last year  when revenue rose by 2% , profit went up by 4%, and PEP dipped by a little under 1%.

These results are impressive in a year that has seen firms from Linklaters  to Fieldfisher post declines  in PEP. While Clydes’ PEP remains short of 2021’s figure of £715,000, the firm notes that it brought in 38 lateral hires, added 46 new partners through the BLM merger, and made 26 internal promotions.

The firm now reports 3,200 legal professionals, of which 490 are partners – an increase of 52 partners (11%), and total headcount growth of 45%.

The proportion of revenue generated outside the UK fell from 56% to 54%, though the total figure increased 16% to £425m. North America accounted for the same proportion as last year (22%), the Middle East and Africa 12%, Asia Pacific 12%, Europe 6%, and Latin America 2%.

The firm continued to expand, with new offices in Bangkok, Boston, Calgary, and Milan, an associated office in Cairo, and the addition of BLM’s offices in Belfast, Birmingham, Derry/Londonderry, Liverpool, and Southampton. The combination with BLM helped Clydes bring UK growth up 28% – the highest growth of any region. North America was in second with 21% growth, while Europe and the Middle East and Africa both grew by 18%.

Corporate and advisory and regulatory and investigation will be key areas of focus moving forwards, with the two practice areas accounting for 14 of the past year’s 38 lateral hires.

‘Our results over the past year speak of a firm in good health and in growth mode’, CEO Matthew Kelsall (pictured) said in a statement. ‘Doubling our revenues in the space of 10 years is a testament to the enduring strength of our strategy and the value it provides clients thanks to our clear and long-held sector focus and our strengths across disputes, regulatory and corporate disciplines. Our focus remains on building and maintaining market-leading positions in all our sectors and practices, while continuing to invest in our people and our technology to ensure the most effective delivery of legal services to our clients.’

Senior partner Carolena Gordon took a similar view: ‘Our clients have continued to place their trust in our people across the globe this year.  We have continued to build out our capabilities and have integrated successfully following our merger with BLM. I am confident that what we have built, including the exceptional talent we have across the firm, puts us in a uniquely strong position to provide clients with the global and commercial-minded support they need to successfully navigate risk and maximise opportunity in today’s complex and uncertain business environment.’

Legal Business

HFW bids for dominance in UAE shipping sector with double Clyde partner hire

In a significant move for the Middle Eastern shipping market, sector specialist HFW has hired partners Robert Lawrence and Ian Chung from rival Clyde & Co in Dubai to strengthen its grip in the region.

Lawrence and Chung are doyens of the shipping sector in the United Arab Emirates, ranked as ‘leading individuals’ in The Legal 500’s Dubai shipping category. Significantly, the pair constituted a large chunk of Clyde’s shipping practice in the region, leaving them with partner David Leckie (who relocated from London to Dubai in May) and legal director Len Soudagar.

As such, HFW has significantly weakened a tier one-ranked rival and consolidated its position at the top of the UAE market.

HFW now has five of the 11 lawyers rated as leading individuals by The Legal 500, with the others being UAE managing partner Yaman Al Hawamdeh and partners Richard Strub and Tien Tai.

Lawrence and Chung have over 30 years’ combined experience in the Middle East. Lawrence is a disputes lawyer with a particular focus on the marine and offshore industries, while Chung is a transactional lawyer specialising in the marine and transportation sectors.

For Chung, it is a return to HFW, having been a partner at the firm until 2017 when he left for Clyde.

Al Hawamdeh (pictured) spoke to Legal Business of HFW’s lofty ambitions in the UAE: ‘By welcoming two of the region’s top maritime and offshore experts to our already preeminent team, HFW is now the clear market-leader for all types of shipping matters, including disputes and transactions.

‘This is just the start of our plans to significantly expand our offering in the Middle East – not just in shipping, but across all of our sectors, including aviation, commodities, construction, energy, and insurance. We are actively seeking partners and teams practicing in those sectors, with a view to establishing HFW as the number one sector-focused law firm in the Middle East.’

Lawrence added: ‘As a shipping disputes lawyer, there is simply no finer place to practise than HFW. The size, expertise and client base of the firm’s global shipping group is unrivalled – it really is the gold standard for advice to the industry. HFW has also consistently demonstrated its long-term commitment to the Middle East – which is incredibly important to local clients – as well as a willingness to invest in bold moves.’

Legal Business

HFW records slipping profits and revenue as it grapples with Covid recovery

HFW attributed a 1% dip in revenue from £200m to £198.7m to a ‘prudent’ reduction in lawyer headcount during the pandemic, while profit per equity partner (PEP) also slipped.

PEP was down 2% from last year’s record high of £683,000 to £669,000, which the firm chalked up to the drying up of pandemic-era cost savings: ‘HFW saw exceptional cost savings during the pandemic. These cost savings diminished during FY22 as countries across the firm’s global network began to return to normality.’ Equity partner levels are understood to have remained broadly flat on last year.

HFW said that in addition to pandemic-enforced lawyer headcount cuts (the firm said average lawyer headcount was down 2% from 2021), ‘a strengthening of the British Pound’ impacted the firm’s revenue by 3%. The firm claims that without this, revenue would have increased 2% to £204.9m – 60% of HFW’s total turnover is generated outside the UK, up from 35% a decade ago.

Managing partner Jeremy Shebson [pictured] told Legal Business: ‘It was a concerted aim of the partnership to spread our revenue out internationally. Giles [Kavanagh, senior partner] and I were part of a sector in aerospace that became a key player in growing the international side of the firm. Likewise, our other key sectors require us to be global in nature.

‘Nevertheless, it is quite important to us that we see ourselves as one firm. And it was very important to [former senior partner] Richard Crump, who oversaw a shift in international billings from 30% of the firm to 60% in a decade.’

Shebson added: ‘In 2021 we really did experience exceptional savings, and managed the business very carefully. Since then our people have started moving around the network much more, and we’ve revamped our IT system, while also starting to make other investments.’

Despite this year’s muted results, HFW is broadly on an upward trajectory: both revenue and PEP have grown by more than 40% since 2015.

Fortunes were better at Clyde & Co where revenues grew 3% from £639.6m to £650m on a constant currency basis, and 2% in pounds sterling.

Profit increased by 4% from £153.3m to £159m, although PEP was marginally down from £715,000 to £708,000. Clyde pointed to an inflated number of equity partners in the last year to explain the PEP drop, as partnership numbers swelled thanks to 21 lateral hires and 23 internal promotions.

Partner numbers will be further expanded in the next financial year, as Clyde’s merger with insurance firm BLM went live in July. The combination is set to produce a £740m firm, with 2,600 lawyers and 480 partners worldwide.

Clyde has been particularly expansive in recent times – last year the firm opened offices in Chile, Phoenix, Las Vegas and Denver in the US as well as an office in Canada via a tie-up with SHK Law Corporation. This has translated into a global shift in revenue sources: last year over half (56%) of the firm’s revenue was generated outside the UK, with North America now contributing 22% of firm-wide turnover.

The long-term view for the firm is favourable: in the last decade, revenues at Clyde have more than doubled, while PEP has gone up 29% despite a 90% boost in partner headcount.

Clyde chief executive Matthew Kelsall said: ‘We are a firm that is ambitious and bold in our approach to growth, which the merger with BLM underlines. Looking forward we are focussed on further strategic expansion, investment in technology and our people, as well as a renewed focus on legal delivery and innovation.’

Legal Business

BLM salaried partners forced to re-apply for roles as Clyde merger looms

Salaried partners at BLM will have to re-apply for their positions once the firm’s merger with Clyde & Co goes live on 1 July.

Subject to a consultation, the salaried partners at BLM will be automatically transferred to Clyde with the title of legal director, and then given three options. Aside from remaining a director, they can apply to become a salaried partner (this option is only open to the casualty insurance practice) or a full equity partner at the merged firm.

The salaried option being confined to the casualty insurance practice is because the vast majority of the practice will be staffed by legacy BLM lawyers, whose clients have historically prioritised value. Clyde did not comment on whether legal directors should expect a salary broadly consistent with their BLM payouts.

Of the roughly 140 salaried BLM partners, those who do not accept the legal director position will be subject to a redundancy process.

A Clyde spokesperson said: ‘We can confirm that a consultation process has started involving BLM’s salaried partners ahead of our merger with them going live on 1 July. While the vast majority of our BLM colleagues’ roles will transfer to Clyde & Co, we do not have a role equivalent to that of a BLM salaried partner at the firm. As such it is proposed that all salaried partners will become legal directors and in parallel are given the chance to apply for a new Clyde & Co salaried partner role that will exist only in our casualty practice, or for the role of partner.

‘We appreciate this is a disruptive and potentially unsettling time for the individuals involved and we will be supporting them through the consultation process. As the consultation is ongoing it would be inappropriate to comment further.

‘We are excited about realising the benefits of our merger for our clients and our people. We are creating the largest casualty insurance practice in the UK and will have the ability invest in technology, provide clients with access to the largest dataset in the industry, and go to market as a whole-of-market, and truly national provider of legal services to the insurance sector.’

Additionally, as part of the merger process, BLM’s offices in Manchester and Liverpool will be consolidated into one new Manchester hub. As a result, all of BLM’s staff in Liverpool will be subject to a redundancy process, however the majority will be offered hybrid working roles in the Manchester office.

A source close to the plans said that BLM had been reviewing its property portfolio long before the merger, and that the move is reminiscent of the firm’s decision to close its Leeds and Bristol offices in 2020 to focus on hybrid working.

A BLM spokesperson said: ‘We can confirm that as part of the TUPE consultation consequent upon the merger with Clyde & Co, we are also in consultation with BLM colleagues based in Liverpool on a proposal to close the current office and reduce our footprint in the city significantly. This follows on from our comprehensive property review.

‘We are pleased that, subject to consultation, the majority of our staff based there will be offered roles in Manchester on a hybrid working basis. We are mindful that this is a disruptive time and may be concerning for the individuals involved and we will be supporting them through the consultation and integration process. As it is ongoing, it would be inappropriate to comment further at this time.

‘Our merger with Clyde & Co is based on our shared ambition to be the market leading insurance practice in the UK. All of our decisions for the merged entity will be based on ensuring we have the service offering, technology and delivery processes to meet the needs of our clients now and in the future.’

In March, Legal Business revealed that a partner vote on a merger between Clyde and BLM was imminent. The following month, market commentators offered conflicting views on whether the tie-up represented a trend of consolidation in the insurance sector.

Legal Business

‘Buffeted from both sides’: City partners react as Clyde & Co and BLM finalise merger

With partners from Clyde & Co and BLM recently voting through their £700m merger, observers have offered conflicting views on what the tie-up means for the market.

Legal Business broke the news on 18 March that a partnership vote was imminent, and Clyde confirmed on 28 March that the vote had passed, with the combination to go live in July 2022.

In terms of the key stats, the merged firm, which will still be known as Clyde & Co, will comfortably break £700m in combined revenues, have an overall headcount of 5,000, and boast offices in more than 60 cities worldwide. As for fee-earners, post-merger, the firm will have around 2,600 lawyers and close to 500 equity partners.

A statement made it clear that the tie-up is an insurance play, which is no surprise. Clyde & Co has historically been strong in advisory and contentious insurance work, and BLM has a market-leading niche casualty insurance practice. The statement read: ‘The majority of [BLM’s] lawyers will join [Clyde & Co’s] casualty insurance practice, with other sizable groups joining the professional liability, healthcare and business advisory teams.’

James Cooper, partner and chair of the firm’s global insurance practice group, said: ‘We have long sought to increase the scale of our UK casualty insurance practice though a merger so we can provide the full scope of services, technology, data analytics and innovation that clients in this dynamic part of the market require. Once we started speaking to BLM, we quickly realised that we shared the same approach to client service, had a complementary client roster and similar ambitions in this space.

‘This combination will also boost our regional UK presence and strengthen our healthcare and professional liability offerings too.’ On the office front, the tie-up adds new outposts in Birmingham, Liverpool and Southampton to Clyde & Co’s UK coverage.

The move did not shock insurance partners at rival firms, with the tie-up having featured in market chatter for close to a year. Generally, the merger has been well-received, and viewed as symptomatic of a consolidating insurance market that has refined legal services to a binary between high-end advisory work and high-volume claims work. Typically, Clyde has embodied the former while BLM’s casualty practice fits into the latter.

A recent example, in January 2021 Kennedys opened in Leeds via the takeover of Langleys’ insurance team. The move gave Kennedys coverage in high-volume aspects of insurance, such as motor liability matters and a practice that provides pre-litigated claims handling services to insurers and self-retained corporations.

Richard Leedham, a litigation partner at Mishcon de Reya with extensive experience in the insurance market, told Legal Business: ‘We see consolidation on the defence side all the time, this is just the latest iteration of what firms such as Clyde and Kennedys have been doing. The merger doesn’t surprise me at all – it is likely driven by rates, economies of scale and keeping prices down for their insurer clients.’

Zulon Begum, a partnership law partner and specialist in law firm mergers at CM Murray, added: ‘Coming out of Covid, we are getting lots of enquiries from firms looking to merge or seek external investment. I predict there is going to be lots of activity this year in terms of mergers and IPOs.

‘It’s always the mid-market that you fear for, being buffeted from both sides by the big firms and boutiques. Then you have the likes of the Big Four accountancy firms, which can leverage their multidisciplinary experience and take work from the mid-market – they’re not going to compete with the likes of Slaughter and May and Linklaters, they’re going after the mid-market firms that don’t have the same brand power.’

However, a litigation partner at a leading insurance firm suggested the consolidation trend is phasing out: ‘I don’t sense there is a huge client push for further consolidation. Procurement has a heavy influence of course, but their sole objective is not necessarily to reduce panel sizes. They still need access to the right legal expertise and too few panel firms leaves them with conflict issues and, in the end, having to appoint more firms off panel.’

The merger is Clyde & Co’s biggest in terms of revenue and headcount since it merged with Barlow Lyde & Gilbert in 2011, which was the largest-ever merger of two UK law firms at the time. Since then, Clyde’s recent history has been peppered with tie-ups. In October 2015 it merged with Scottish residential property specialist Simpson & Marwick, adding 45 partners in the process. The following year, a combination was agreed in Sydney with Lee & Lyons, adding five partners and over 25 lawyers. In 2018, 15 partners and 65 other lawyers and staff were brought in via a merger with California firm Sedgwick, and in July last year, Clyde combined with Vancouver-based SHK Law Corporation, which brought six partners and 18 lawyers in total.


Legal Business

Clyde & Co and BLM to merge with partner vote imminent

Clyde & Co and BLM are at an advanced stage of merger discussions, with both sets of partnerships due to vote on a tie-up before the end of March.

Legal Business understands that there is significant confidence that the deal will be green-lit.

According to the latest available LB100 data, the merger would create a £736m turnover firm with a combined headcount of over 2,500 lawyers and in excess of 450 equity partners.

It is understood that the merged entity will be known simply as ‘Clyde & Co’, a reflection of the respective sizes of the two firms. Clydes constitutes £640m of the combined revenue and 1,966 lawyers on its own. There are still details to be ironed out, particularly in relation to a combined leadership structure and what kind of roles BLM’s current managing and senior partners, Vivienne Williams and Matthew Harrington respectively, will be offered.

The combination has been in the offing since late 2019, when Clydes approached BLM and mooted a tie-up. It is a naturally attractive proposition for BLM, as one of many firms feeling the consolidation squeeze in the lower mid-market. In 2017, the firm slashed a considerable number of support staff as part of a wider restructuring effort.

Merger talks stalled as a result of the pandemic, before RollOnFriday broke the news in October 2021 that the two firms were in preliminary discussions.

There are obvious synergies between the two firms, with crossovers in areas such as insurance and professional indemnity. However, BLM will also bring Clydes access to established niche practices in casualty insurance and healthcare. Reflecting that strength, BLM has historically featured on NHS legal advice panels.

Neither firm is a stranger to mergers: In 2011 Clyde & Co combined with Barlow Lyde & Gilbert in a major deal, while BLM was born out of a merger between Berrymans and Lace Mawer. Prior to the Barlow tie-up, Clyde had scant regional UK coverage, but a BLM merger would extend its reach to new outposts in Birmingham, Liverpool and Southampton.

A Clydes spokesperson said: ‘We can confirm that Clyde & Co is in discussions about a merger with BLM. As the world’s leading insurance law firm, we are always looking to grow for the benefit of our clients. We have long sought to significantly increase the scale of our casualty insurance practice in the UK so that we can provide the full scope of services, technology, data analytics and innovation that clients in this dynamic part of the insurance market require.

‘We consider a merger such as this the best way to realise these ambitions. BLM is a firm we have long admired and we believe a merger can be formed on the basis of our complementary client rosters and our shared focus on quality.

‘As this merger is not yet finalised it would be inappropriate to comment further at this stage.’

A BLM spokesperson added: ‘Following detailed discussions and a period of due diligence, BLM and Clyde & Co partners will vote on a proposed merger of the two organisations. The Executive Board set strategic objectives around how best to grow the firm and secure our status as a market leading, innovative and full-service law firm across the UK, Ireland and internationally. We believe that a potential combination with Clyde & Co would provide us with the growth needed to develop our business.

‘The result of the vote will depend on whether, in the respective partner group’s view, combining the firms is in the best interests of our colleagues, clients and the wider businesses.

‘The strategic and commercial compatibility of the two firms is undeniable. We are both dominant in risk and insurance and our respective businesses complement each other. Whilst Clyde & Co is a global business, we both have an extremely strong presence in the insurance sector in the UK and Ireland. Clyde & Co also boasts a strong offering in business and advisory services.

‘More details will be provided as soon as the vote has taken place.’

Legal Business

Kennedys opens 36-strong Leeds office as TLT and Clydes expand overseas 

In an expansive start to the new year, UK firms Kennedys , TLT  and Clyde & Co have established new frontiers at home and abroad.

Kennedys has opened its 42nd global office, and its 12th in the UK, with a Leeds launch via the acquisition of Langleys’ insurance team. The new office will be headed up by David Thompson, formerly managing partner and head of insurance at Langleys. He will be joined by three other partners and 32 team heads, lawyers and staff from the insurance group.  

Of the joining partners, Huw Edwards focuses on motor liability matters, Laura Collins manages a team which provides pre-litigated claims handling services to insurers and self-retained corporations, and Carol Dalton acts for insurers on public liability matters.

Thompson commented: ‘It puts us in an excellent position to further grow our practice from our new base in Leeds. Many of our clients already work with Kennedys so I know that it is a move that our clients will very much support.’

The opening comes at an intrepid time for Kennedys, with the firm establishing new bases in San Francisco and Israel last year along with an association with Canadian insurance firm Dalden Wallace Folick.

Meanwhile, Bristol-based TLT has entered into a strategic partnership with Belgian firm GSJ advocaten. The partnership is the second of its kind TLT has pursued on the continent, after a similar relationship was forged with Dutch outfit Holla in June last year.

The partnership brings synergies between the two in key sector specialisms such as real estate, financial services, retail and the public sector. It also gifts TLT a vital post-Brexit Belgian presence, in the heart of the EU.

TLT’s head of international Chris Owen told Legal Business that while Brexit was not a deciding factor in the partnership, it played an important role for clients: ‘A lot of our work is in retail and the public sector, which involves a lot of logistics, which is obviously a big issue at the moment for clients. They want us to have a presence in Europe as that is where they are doing business.’

Owen added that the tie-ups with Holla and now GSJ mark an ongoing demand from clients who want European support. He said: ‘In the long-term we are interested in France, Germany, Scandinavia and the Baltics are interesting from a fintech perspective.’

Finally, Clyde & Co has launched a new regulatory and investigations consultancy arm in Dubai through the hire of Neal Ysart. Ysart, who arrives from EY’s Dubai office, has over 35 years’ experience in investigations, including a 16-year stint in law enforcement, which involved a tenure at Scotland Yard.

The objective of the new consultancy is to provide Middle East-based organisations with an advisory service which recognises, investigates and manages the threat of financial crime and other regulatory risks.

The consultancy is made up of both lawyers and former regulators, and will be headed up by Clyde’s partner and head of regulatory and investigations in the Middle East, Matthew Shanahan.

Shanahan said: ‘Typically organisations have to engage both management consultants and lawyers to achieve their objectives. With Neal’s strategic experience and our team’s broad range and depth of expertise, this new service will provide a one-stop-shop that will save both time and money, and also help ensure that any legal or regulatory concerns are identified early.’  

Legal Business

‘Stable and consolidated’: Clydes posts steady revenue growth but profit hit after year of investment

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 sectorbased and global makes us better placed than most. We’re stable and consolidated.’ 

Legal Business

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