The magic circle – a new ring leader to emerge?

Clifford Chance and Freshfields have both announced their financial figures for the 2007-08 financial year but, rather than giving a clear picture of how the magic circle as a whole has fared, the numbers have thrown up more questions than they have answered.


Top of the PEPs Revenue PEP Table

Clifford Chance and Freshfields have both announced their financial figures for the 2007-08 financial year but, rather than giving a clear picture of how the magic circle as a whole has fared, the numbers have thrown up more questions than they have answered.

Here’s one to mull – why, if the marketing, service level and client base of all magic circle firms are so similar, have Freshfields and Clifford Chance experienced such different fortunes this year?

Everyone’s in agreement that the second half of the financial year was tough, as the chiefs at both firms have been at pains to note.

But while Clifford Chance’s growth has been relatively muted – 11 per cent turnover rise and 13 per cent increase in PEP – Freshfields has had a stonking year.

True, a major firm-wide restructuring which saw umpteem equity partners culled from the firm will have played a role in a 39 per cent increase in PEP, but that’s not the whole story. The restructuring happened in 2006-07 after all – the same period in which Clifford Chance put in place its own sweeping cost-cutting measures.

And while Clifford Chance is so far holding on to its position as the UK’s number one firm in terms of revenue, it is interesting that Freshfields has achieved revenue growth of 19.5 per cent over the past 12 months, far outstripping the rate seen by Clifford Chance.

If Freshfields, which has won major roles on a raft of high-profile deals, can achieve that level of growth, surely Linklaters can too? After all, the firm has been present on a first class roster of major mining deals, rights issues and M&A transactions.

If that happens then Clifford Chance can wave goodbye to its largest-law-firm-in-the-world-by-revenue crown.

So come on Links and A&O, show us the money. Well, the figures, at least.

Previous blogs:

27-June-2008, Walker Morris: Turn down the volume

27-June-2008, Hill Dickinson: A tale of two cities

20-June-2008, LG: “frustrating and disappointing”

13-June-2008, Trowers & Hamlins: set back, or de-railed?

12-June-2008, Stephenson Hardwood: joining the club

11-June-2008, Ward Hadaway, Leeds and Hoyle: the long game

10-June-2008, Lewis Silkin: credit where due?

09-June-2008, Freshfields: equity cull pays off

06-June-2008, Martineau Johnson: mission accomplished?

05-June-2008, Addleshaw Goddard: babies and bathwater

04-June-2008, Technology firms: RPP reveals all

02-June-2008, The magic circle – a new ring leader to emerge?

30-May-2008, Berwin Leighton Paisner: could do better

29-May-2008, Links to take CC’s crown?

28-May-2008, FFW: surprise performer

22-May-2008, Herbert Smith lays down the gauntlet

19-May-2008, Second tier is out to impress