Revenues dip as growth slows at Clifford Chance

Elizabeth Fournier

REVENUES at Clifford Chance fell by 2.5 per cent in 2012-13, the magic circle law firm said yesterday, as a depressed M&A market dragged on its performance.

Revenues fell to £1.27bn from £1.3bn last year, but were broadly flat once currency fluctuations are taken into account. Profits dropped by six per cent to £404m from £431m, while profits per equity partner fell back to £1.1m – a nine per cent decrease after four years of growth.

Managing partner David Childs said that the slowest start to the year for M&A deals for a decade had hit activity.

“Last year we predicted tough conditions, and unfortunately those predictions were correct,” he said.

Though the firm has won high profile regulatory and contentious work in recent months – working for Shell on the EC competition investigation into oil pricing, and advising Barclays on its internal probe into the Libor saga – Childs said the increase in that type of work had not been enough to balance out the lack of deals.

In the UK, where Clifford Chance brings in 35 per cent of its turnover, revenues were in line with last year at £443m, while in continental Europe they dipped by five per cent from £492m to £467m, largely due to fluctuations in the euro. The continent now counts for 37 per cent of revenues.

Clifford Chance’s Asia Pacific offices accounted for £175m in revenues and just 14 per cent of the firm’s total – down three per cent from last year’s £185m. Revenues in the US and Middle East were broadly flat.

Childs said that despite a slow start to the year, the firm had started to see an upturn in transaction in recent months. “While we may not yet be seeing a large number of high-value deals, there is a sense of increased market confidence,” he added.

Despite the dip in revenues, Clifford Chance is still the largest UK law firm by turnover, ahead of Freshfields, Linklaters and Allen & Overy.