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The firm’s revenue is up 26 per cent and profit per equity partner up 46 per cent, but just what is the secret behind the massive growth at Osborne Clarke?
Rewind to 2008/09. The economy was in the doldrums, with many firms posting a substantial drop in revenue and profits.
Osborne Clarke was no different. In fact, at the end of the 2008/09 financial year, the firm witnessed its revenue tumble by a staggering 11.9 per cent from £95.3m to £84m (15 July 2009).
In response, the firm’s management went back to the drawing board, searching for ways to reverse its financial fortunes and become a serious player in the mid-tier of the global legal market.
Their conclusion? International expansion. And not in a half-hearted, non-committal sort of way. Since 2012 Osborne Clarke has gone hell for leather, tripling its number of offices from six to 18, and more than doubling partner headcount from 121 to 180.
The first step, in March 2012, was disbanding its European alliance with the aim of becoming a standalone European firm. It immediately merged with its Spanish and Italian alliance partners Osborne Clarke Spain and SLA Studio Legal Associato, kickstarting the strategy with six offices in Europe (29 March 2012).
The latest addition to its collection, Amsterdam, launched just last week (2 June 2014). But within the last year the firm has also popped up in Paris, Brussels, New York and San Francisco.
The brace of US bases is geared primarily towards marketing for new global clients and steering them towards the firm’s lawyers closer to home. For instance last month the firm won a spot on Apple’s record-breaking £3.3bn buyout of Dr Dre’s music platform Beats, a mandate sourced through the firm’s Silicon Valley office (30 May 2014).
The focus of the firm’s offices is tightly ring-fenced within its chosen sectors: digital business, energy and utilities, financial services, life sciences and healthcare, real estate and infrastructure, recruitment, retail and transport and automative.
Digital business, in particular, has proved an effective springboard for new business - with the majority of Osborne Clarke’s new office openings growing off the back of work in the sector. In Amsterdam, the firm intends to use the same blueprint, before expanding into other areas.
All this movement has had a transformative impact on the firm’s bottom line. Osborne Clarke has pushed well ahead of the pack in terms of revenue growth for 2013/14, pushing up turnover by a whopping 25.9 per cent to £142m. Its net profit soared by 32 per cent to £35.4m. Meanwhile, average profit per equity partner (PEP) ballooned by 46 per cent, from £350,000 to £513,000.
That means that since 2011/12, revenue has blossomed by 45 per cent from £98.2 while PEP has risen by 26 per cent from £406,000.
Meanwhile, total partner headcount has jumped up from 121 to 180. The firm’s head office has switched from Bristol to London, and UK partner headcount has just crossed the 100 threshold. The dramatic growth is quite a feat, particularly given the weighty costs associated with opening a raft of new offices.
Like so many firms that have learned the hard way, fast-track expansion always comes with the risk of falling flat. But Osborne Clarke has demonstrated that pouring resources into calculated growth can also project a business onto the global stage.