2 July 2019
Clifford Chance announces its 2019 financial results: Continued growth and investment in line with strategic priorities
Our financial results for the year ended 30 April 2019
- Revenues of GBP 1,693 million, representing growth of 4.3% year on year
- Partnership profit GBP 637 million, up 2%
- Profit per equity partner GBP 1.62 million, up 1%
- In Euros, these figures are equivalent to revenues of EUR 1,930 million, profit EUR 726 million, profit per equity partner EUR 1.84 million
- In US Dollars, these figures are equivalent to revenues of USD 2,218 million, profit USD 835 million, profit per equity partner USD 2.12 million.
- Fourth consecutive year of record revenues, partnership profit and PEP
Four-year progress since the introduction of the firm's new strategy in 2015
- 25% increase in global revenues – with 45% growth in the Americas and 50% in APAC
- 42% increase in partnership profit
- 45% increase in profit per equity partner
- Balanced revenue base: 37% corporate enterprises; 31% financial investors*; 32% banks
Matthew Layton, Clifford Chance's Global Managing Partner comments:
"I am delighted that we have delivered a fourth consecutive year of growth under our strategy, and the firm's best financial results to date. It is especially pleasing to see that the growth in revenue and profit in this period has come from across all regions and all practice areas, with particularly strong progress against key strategic priorities, including the Americas, Asia Pacific and our Corporate practice".
Developing trends in the market
"One particularly notable trend has been the continued growing importance of financial investors. With total assets under management having more than doubled to over USD 80 trillion since the financial crisis, financial investors are increasingly active and influential players in the global economy. As a result, their need for sophisticated, world-class legal advice is also increasing. Given our long history of working with these dynamic and diverse organisations, we are ideally placed to support their continued strategic development and success. Our work with leading financial investor clients saw sector revenues grow by more than 20% over the year".
"The last financial year saw our results continue their upward trajectory despite some widely reported headwinds from the third quarter on, including rising tensions in the US-China trade dispute, a further slowdown in China and the Eurozone, ongoing emerging markets volatility, and continued uncertainty about Brexit. While these developments dampened business confidence, investment, and activity levels, they also created opportunities as clients have turned to us to help them navigate the turbulence".
Investing for the future
"We consider it more important than ever to invest in the people, skills, systems and ways of working that will be fundamental to our future success in a rapidly changing market".
"We continue to recruit and develop the best legal and other professional talent in the market as we build out our capabilities, particularly in the Americas, in our growing Tech Group, and in our Innovation and Best Delivery expertise. At the same time, we are investing to take our core operational capabilities, including our IT systems and cyber defences, to the next level to ensure that they are fit for the future needs of our clients and our global business".
"These investments are aligned with our commitment to reinforce our strong culture, uniting everyone in the firm behind a shared set of values and ambitions. Over the last twelve months, inclusion in all its forms has been a particular focus, and we have made important progress. But there is more for us to do. A shared priority for me and our Senior Partner, Jeroen Ouwehand over the coming years will be to ensure that our culture continues to evolve to remain relevant, compelling, and a positive differentiator".
"There are certainly challenges for all businesses in the year ahead. However, I am confident that by staying true to our clear and established strategy and by working shoulder to shoulder with our clients, we will continue towards our vision of being the global law firm of choice."
Operational and strategic key points
Reinforcing our team and our culture
- Investing in talent and skills - promoted 30 new partners and added 13 laterals, with a further three announced since May; continued strong focus on key markets in the US, in Europe, such as Luxembourg and Germany, and in Greater China; invested in talent in increasingly important areas including data science and data analysis, legal project management, legal tech, resource management and robotic process automation
- Clifford Chance Choice – launched a new framework to support a flexible approach to work for lawyers, including pilot programmes with the firm's current associates and alumni
- Lawyer evaluation pilot – launched a year-long trial across the firm's offices in the Middle East to understand the impact of removing utilisation from the assessment of lawyer contribution and performance
- Global Head of Inclusion and Diversity – hired leading equalities campaigner, Tiernan Brady, who drove the successful marriage equality campaigns in Ireland and Australia, to accelerate progress across the full spectrum of inclusion and diversity issues
- Reverse mentoring – launched a new diversity and inclusion programme where senior leaders are mentored by a more junior colleague
- Accelerate>> - created a global gender parity group, committed to taking bold actions to accelerate the pace of change towards gender parity and drive forward an inclusive and diverse culture across the firm
Advancing our Innovation and Best Delivery strategy
- Clifford Chance Applied Solutions – established as a separate business entity with a specialist team of product developers, product managers and SaaS sales and marketing specialists, led by newly-hired CEO, Jeroen Plink; launched SMCR Manager to help financial institutions prepare for and comply with the newly extended Senior Managers and Certification Regime
- Clifford Chance Create – launched the firm's first legaltech innovation lab, Create+65 in Singapore supported by Singapore's Economic Development Board and the Academy of Law's Future Law Innovation Programme; made the firm's first third-party investment with a significant funds injection into legaltech services automation platform, Reynen Court
- Best Delivery – continued the roll-out and development of the firm's Best Delivery Hubs, now located in Dubai, Frankfurt, New York, Paris, London (three practice-focused hubs) and Singapore; accelerated deployment of our alternative legal resource centres in Newcastle and Delhi, doubling their number of billable hours
Investing in the resilience and sustainability of our business
- Information security and cyber defence – invested in people and systems to protect the firm from cyber threats, to mitigate the impact of incidents, and to support our ability to continue to service our clients
- Upgrading business-critical IT systems to optimise efficiency and risk management – including the firm's systems for document management, conflict and clearance processes, core HR services, financial management, billing and management information
- Enhancing infrastructure to support mobile and agile working – including videoconferencing, mobile voice and data services
- Compliance – expanding our compliance teams internationally, in light of a more complex and demanding global regulatory environment and continued evolution in client expectations
- Enterprise risk – developing a sector-leading programme to allow us to better identify, manage and treat strategic risks, with regular reporting of Key Risk Indicators and other management information to the firm's most senior leadership
Selected client work highlights
During the 2018/19 financial year, Clifford Chance advised:
- Huatai Securities as English, US and Hong Kong counsel on its London stock market listing – the first ever under the new Shanghai-London Stock Connect programme
- Samarco Mineração (Vale/BHP joint-venture) on its USD 3.8bn debt restructuring
- On multiple representations in connection with the Mueller investigation
- Autonomy founder Mike Lynch in connection with the largest civil fraud trial in UK history and related US criminal charges and investigations arising out of HPs 2011 acquisition of Autonomy
- Canary Wharf Group on its victory against the European Medicines agency in a GBP 500m lease dispute. Commentators speculated that, had the case been lost, it could have opened the door to many similar claims of ‘legal frustration’ resulting from the impact of Brexit
- The UK's official receiver on the insolvency of British Steel
- Network Rail on the sale of its commercial real estate portfolio to Telereal Trillium and Blackstone Property Partners for GBP 1.46 billion
- Dassault Systèmes in relation to the USD 5.8bn acquisition of healthcare software maker Medidata
- Pfizer on a consumer healthcare joint venture with GlaxoSmithKline to create a premier global consumer healthcare company with combined sales of almost GBP 10bn
- Fairsearch as the main complainant in the European Commission investigation into Google's anticompetitive practices relating to Android, leading to a EUR 4.34bn fine
- Deutsche Post DHL Group on the RMB 5.5bn transfer of its supply chain operations in Mainland China, Hong Kong and Macau to S.F. Holding
- Global payment platform Adyen, considered the only Dutch Fintech unicorn, on its IPO and listing of shares on Euronext Amsterdam, valuing the business at approximately EUR 7.1bn
- Public Investment Fund, in co-operation with AS&H, on its USD 69.1bn sale of a 70% stake in SABIC to Saudi Aramco
- Leading private equity firms, MBK Partners and TPG on the merger of telecommunications businesses WTT and Hong Kong Broadband Network Limited, which valued WTT at HK$ 10.5bn
- The joint sponsors and underwriters on China Tower's USD 6.9 billion IPO
- Carlyle on investments into Ant Financial and Baidu FSG.