Clyde & Co

UK 200 RESULTS 2010

It was another year of expansion for Clyde & Co, which reported a 3.8 per cent rise in revenue at the financial year-end, from £185m to £192m.

Sustainable growth at the firm comes as a direct result of a number of initiatives aimed at building up its core practices of litigation, arbitration, insurance and IP, in particular trademark matters. The firm has managed this while also spreading its geographical base, with an eye on targeting work coming from the emerging markets.

Turnover has risen at Clydes steadily and since 2005-06, growing by 53.6 per cent, from £125m to £192m. Net profit has also climbed upwards, standing at £54.5m last year,

a 16 per cent increase on the £47m posted at the 2008-09 year-end.

Approximately 42 per cent of Clydes’ revenue is now generated outside the UK, the equivalent of £80.64m compared with £77m in 2008-09.

Clydes expanded its equity partnership from 87 to 91 during the past financial year and also increased the wider partnership by 14 to 164. New recruits last year included insurance partners Roger Doulton, Neil Beresford and Toby Rogers, who all joined from Barlow Lyde & Gilbert.

The firm operates a 10-year modified lockstep, which stretches from 40 to 100 points. Partners move through gates every three years, reaching plateau within 10 years.

At the end of the last financial year the firm’s average profit per equity partner figure rose by 10 per cent, from £550,000 to £605,000. The firm’s equity spread also moved upwards marginally, now ranging from £286,000 to £885,000.

The increased financial metrics are a result of sustained investment at Clydes. Over the past year this has included the bolt-on of Shadbolt’s London-based construction and infrastructure practice and dispute teams, as well as the UK corporate practice and the Paris office.

The deal also gave the firm a presence in Tanzania through a best friends relationship with AKO Law.

In addition, there have been new offices in New Jersey and Saudi Arabia and a best friends alliance with India’s ALMT, giving it a route into the Indian market.

UK 200 RESULTS 2009

Clyde & Co’s quiet progress continued unabated in 2008-09. It posted one of the largest increases in turnover in the top 100, from £157m to £185m, although that was helped by currency fluctuations. The extent of Clydes’ overseas investment certainly paid off – £77m of its total turnover is from its overseas business. The concomitant advantage in currency fluctuations benefited the firm, although in real terms the firm was up 6 per cent in revenue.

London held steady with £108m, bolstered by big-ticket disputes.

Clydes’ core practice areas of litigation, arbitration, insurance and trade make up 65 per cent of revenue, or £120.25m. Corporate accounts for 22 per cent, or £40.7m. Property and finance account for 7 per cent (£12.95m) and 6 per cent (£11.1m) respectively.

The biggest growth was in the Middle East, which in real terms grew by 46 per cent and now represents some £50m of turnover. It was buoyed by trade, commodities, disputes and international arbitration work.

The firm’s US presence, which was carried out with a series of opportunistic acquisitions, moved into profit in the third year of operation, posting a £13m revenue. Hires included leading marine insurance partner John Woods, formerly of Thacher Proffitt New York. Its low-key San Francisco base, meanwhile, opened a year ago with a four-partner team from Duane Morris, making Clydes the only UK firm to have offices on both the East and West Coasts.

Net profit was remained static at £47m, with average profit per equity partner (PEP) at £550,000. Although PEP did not move, top earners gained slightly more, up from £780,000 to £815,000, thanks to the modified lockstep system and flexible bonus pool, which represents 5 per cent of the total profit. Clydes operates a 10-point lockstep from 46 to 100 points, going up by six points every year. There are three gates, at two years, five years and eight years. The rate of Clydes’ partnership growth over the past 10 years means that most of the partners hover around the high 80 points. There some 27 partners on plateau.

Overseas investment showed no signs of slowing down last year. In July 2008 the firm set up an international board to oversee its global growth, led by commercial partner Anthony Garrod. Moves have included opening in Riyadh with ally Al Bosaily, adding two partners to Abu Dhabi and forging an alliance with Indian firm ALMT Legal. That growth has been funded by a mixture of partner capital and bank debt. According to the firm’s LLP accounts for 2007-08, that bank debt stood at £45m, but that also includes capital provided by overseas partners outside the UK LLP; the real figure is nearer £30m.