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Clifford Chance has boosted its average profit per equity partner (PEP) figure by 25 per cent in the past financial year, posting what managing partner David Childs described as a “strong set of results in difficult market conditions”.
Total revenue at the magic circle firm was £1.2bn for 2009-10, a 5 per cent decline against last year. PEP stood at £933,000, up 27 per cent on last year’s figure of £733,000, but still 20 per cent down on the 2007-08 high of £1.17m.
The firm has changed the way it accounts for partner annuities, with a like-for-like comparison showing only a 25 per cent hike in PEP from £747,000 last year.
Of Clifford Chance’s six practice areas, Childs identified litigation and finance as those showing the strongest performance over the past 12 months.
Despite the fall in annual turnover, Childs said that revenues were now increasing month-on-month across all its offices.
Pre-tax profits at the firm were £350m, up by 13 per cent. Although Childs confirmed that the majority of the firm’s partner redundancy programme was carried out in the 2008-09 year, the firm still reduced its cost base by around 10 per cent, equating to a £100m saving.
He added: “The push [in cost saving] will be difficult to repeat. Profitability will have to be driven by revenue increasing, not cost cutting.”
Asia was the best performing market for Clifford Chance, with revenue up by 21 per cent. The region now accounts for 10 per cent of its income. Meanwhile, turnover in the UK and Middle East was down by around 9 per cent, while Europe fell by 8 per cent.
Childs said he did not expect there to be a double-dip recession and predicted that turnover would begin to increase next year.
The figures put Clifford Chance ahead of magic circle rival Linklaters, which in 2008-09 year posted the largest turnover of any UK firm. This week, Linklaters revealed that its turnover for 2009-10 was £1.18bn (5 July 2010), down 8.8 per cent on last year.