Clifford Chance hands partners £2mn as profits surge

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Clifford Chance partners were paid more than £2mn last year as the law firm achieved double-digit profit growth, driven in part by high-profile litigation work, such as the defence of former Autonomy chief executive Mike Lynch.

Equity partners — the top tier of lawyers at the firm — took home £2.04mn on average in its past financial year, which ran to the end of April. Partnership profits, as a whole, were up 10 per cent, to £856mn, excluding non-equity partners and partner annuities.

Clifford Chance, which is a member of London’s elite “magic circle” of corporate-focused law firms, has invested heavily in partner hires over the past year, and benefited as dealmaking picked up in the UK and Europe. It was also helped by a number of long-running litigation matters coming to a head. Overall, the firm’s revenues increased 9 per cent over the year, to £2.3bn.

Its results echo those of magic circle peers Linklaters and A&O Shearman, which also recently reported a rebound in their revenues and profits, thanks to a recovery in dealmaking work. In addition, all three firms have been making significant investments in the US — the world’s largest legal market. A&O Shearman is itself the product of a $3.5bn transatlantic deal: a merger between the UK’s Allen & Overy and New York’s Shearman & Sterling, which completed in May.

In the US, Clifford Chance increased its revenues by 28 per cent, as it successfully defended tech entrepreneur Lynch in one of Silicon Valley’s biggest fraud cases. His 12-week trial capped a more than decade-long saga, and mandate, for the law firm.

In the UK, notable successes included defeating a £1bn damages claim brought against its client EE by Phones 4U over alleged collusion in the telecoms market. Clifford Chance also advised Virgin Money on its £2.9bn takeover by Nationwide.

“What we’ve seen is . . . an ordinary cycle of litigation takes the place of frenzied transactional markets . . . [and], actually, the pedal didn’t go off [M&A markets] as much as people feared,” said Charles Adams, the firm’s global managing partner, in an interview with the Financial Times.

“When I look back, [the year] started with still quite a stuttering transactional space [and] strong litigation, but we’re seeing . . . one continue and the other start up again,” he added.

Like its UK peers, Clifford Chance has lost partners to US-founded rivals in recent years, as several elite American outfits invested heavily in the London market. However, the UK firm has been aggressively hiring in its own right, with 29 partners joining from competitors last year, in addition to the 29 partners that it created through internal promotions.