The average partner at Clifford Chance will earn more than £1 million this year as Britain’s biggest law firm continues its recovery from the financial crisis.
Clifford Chance saw partner profits plummet to as little as £733,000 in the depths of the downturn, while rivals Allen & Overy, Freshfields Bruckhaus Deringer and Linklaters, less dependent on big banking clients, held profits above £1 million per partner.
However, Clifford Chance said today that it had continued to make up ground on its competitors by increasing partners’ profits by 8 per cent for the year to May. Total profit available for distribution among partners was up 10 per cent to £381 million.
Revenues were up 2 per cent to £1.22 billion, making a return to growth after falling 5 per cent the previous year.
David Childs, Clifford Chance’s global managing partner, said that growth was driven by demand from financial clients for advice on the flood of new regulations to have emerged from the banking crisis, and from soaring demand for legal services in new markets such as Asia and Latin America.
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Mr Childs said: “This is a strong set of results which demonstrate how our investments over many years are delivering for the firm and for our clients. We are very pleased to be in growth mode again and to see our profitability further strengthened.”
Fees in Asia-Pacific were up 16 per cent to £145 million and Mr Childs said the firm expected to double this within the next few years.
More than half of Clifford Chance’s partner promotions this year were based in the region and it launched an office in Australia with the acquisition of two boutique corporate law firms. Further investments are in the pipeline, Mr Childs added.
The firm is also aiming for rapid growth in the Middle East, where revenues rose 17 per cent to £37 million, and the Americas, which was flat at £140 million.
The legal markets in Europe and the UK were sluggish by comparison, Mr Childs said. Fees in Europe were down 2 per cent to £467 million, while the London office was up 1 per cent to £430 million.
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This was despite winning significant roles advising the European Financial Stability Fund on its loans to Ireland and Portugal and advising the underwriters of Glencore’s $10 billion initial public offering in London and Hong Kong.
The average partner’s earnings at Clifford Chance are still short of what their counterparts receive at Allen & Overy, Freshfields and Linklaters, but the fact that Clifford Chance has narrowed the gap over the past two years will be seen as shoring up its position among the elite global firms.
Some observers doubted when the financial crisis struck that Clifford Chance would keep pace with its competitors.
The recovery has not been without disruption, however. A controversial restructuring undertaken in response to the banking crisis resulted in the firm shedding about 15 per cent of its partnership, or around 90 partners worldwide.