US growth helps Clifford Chance pay packets rise
9th January 2017
‘Magic Circle’ law firm Clifford Chance’s LLP accounts for 2015/16 have revealed that its executive pay levels increased by 7% year-on-year, which has been attributed in large part to the success of its US operation.
The Lawyer reported that the 12-strong executive team – headed by Matthew Layton, the firm’s global managing partner – saw its total remuneration package rise from £14m to £15m, whilst overall staff costs also saw an increase, from £464m to £482m.
Despite a 4% drop in turnover being reported at the practice’s continental European branch (£469m to £452m), this was the only part of Clifford Chance’s business which saw revenues drop.
Whilst UK, Middle East and Asia turnover did increase, the region’s development paled in comparison to the impressive growth witnessed in the company’s US offices of New York, Sao Paulo and Washington DC, with turnover here rising by 12%.
Although Clifford Chance’s US arm is still a relatively small part of its overall portfolio – its revenues of £175m are a drop in the ocean when the company’s overall turnover of £1.39bn is considered – the encouraging growth is clearly seen as important by the board, which is reflected in the salary rises the executive team have enjoyed.
The decision to boost top-level pay was no doubt partly informed by this year’s figures being a great deal more positive than those for 2014/15, when turnover actually fell by 0.7%.
The improved revenue performance comes as Clifford Chance embark on something of a cost-cutting legal recruitment strategy, with the announcement that trainee numbers will fall by 20% in September 2018, whilst the number of fee-earners have dropped year-on-year by around 2.5%.
With Brexit and an uncertain economy sure to continue providing a challenging climate for even the UK’s biggest law firms, it will be interesting to see whether Clifford Chance’s results keep improving in the 2016-17 financial year and beyond.