Clifford Chance Partnership Profit Up 10% Despite Brexit Slackby
Elite London law firm reports 3 percent revenue growth
Double-digit growth in Americas and 9% in Asia-Pacific
Clifford Chance’s full-year profit jumped 10 percent as the law firm -- one of London’s largest -- expanded in Asia and the Americas to help offset slower growth in the U.K.
Partnership profit rose to 494 million pounds ($636 million) in the 12 months ended April 30, from 450 million pounds in the year-earlier period. Revenue at the so-called ‘Magic Circle’ firm increased 3 percent to 1.39 billion pounds, it said Wednesday.
The firm’s growth in North America and Latin America means that 65 percent of sales now come from outside the U.K., managing partner Matthew Layton said. The firm trimmed salary costs as British clients curbed spending on uncertainty from Brexit, and Chinese and commodities markets slowed. Still, Layton said Clifford Chance will benefit from its position in Asia, where he’s expecting “continuing strong growth over the medium term.”
“We are well-hedged geographically,” he said in an interview. “Particularly strong has been growth in the Americas: that’s grown 13 percent last year, which takes it up to 13 percent of our global revenue -– a very important market for us.”
The U.K.’s vote to leave the European Union could present headwinds for clients and the firm, he said. Deal volumes have fallen since last month’s vote, he said.
“The impact of Brexit is difficult to assess 10 days in,” he said. “We’ve seen people are now in a phase of wanting to see what actually happens, and transactional levels tend to thrive in a more stable environment.” The effect of Brexit, he says, is “the slowdown. Deals that have not yet been signed or committed.”
Revenue from the Asia-Pacific region has doubled over the last eight years, increasing 9 percent to 224 million pounds in most recent fiscal year, and now makes up 16 percent of global revenues. In comparison, U.K. revenue rose 2 percent.