Clifford Chance’s profits jump by nearly a quarter as firm prepares to drastically cut training contract numbers

Magic circle giant’s partners earning more than ever before

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Clifford Chance has unveiled stellar financial results, with overall profit up 23% and profit per equity partner rising to a record £1.23 million.

The news may surprise law students, who were informed by the firm in the autumn that it was cutting UK training contract numbers from 100 to 80 as CC seemingly braced itself for difficult trading conditions after a tough 2015.

With trainees recruited two years in advance, the savings from the reduction in rookies do not figure in the magic circle giant’s newly-published financials — but will presumably boost CC’s profits further when they kick in from 2018.

The Canary Wharf-based firm’s growth in profits — which hit a total of £491 million for the year ending 30 April 2016 — largely came about because of a reduction of associates and other fee-earners, whose numbers fell from 2,377 to 2,315, according to the annual accounts filed with Companies House.

CC’s revenue was pretty flat, edging up by 2.7% from £1.35 billion to £1.386 billion.

The firm experienced fastest growth in the Americas, with revenues rising by 12% from £156 million to £175 million across its offices in New York, São Paulo and Washington DC. Revenues were also up in the UK, the Middle East and Asia. CC did worst in Continental Europe where turnover fell 4%.

9 Comments

Anonymous

Simple logic: cut down the grunts and the profits will follow.

It worked wonders for KWM…

(8)(6)
Anonymous

Why would cutting TCs boost profits during those trainees’ training? They’re billed out for way more than they’re paid.

If anything, it’ll benefit the firm in the short term by reducing the LPC/GDL outlay, but that saving will still be pretty negligible in CC terms.

(7)(0)
Anonymous

Other than the fact that the last paragraph of this article was all but copied and pasted from Legal Week’s article this afternoon, it shows a baffling lack of commercial awareness that LC can describe revenue growth of 2.7% in a billion pound firm as “pretty flat”.

(10)(2)
Tommy Connelly

Could you please set out the precise details of what we copied? You lier.

(1)(0)
Anonymous

“The news may surprise law students…”

Not sure why any law student with an ounce of commercial awareness would be surprised, given that firms are increasingly taking advantage of paralegals. This has allows firms to maximise margins by making paralegals do work a trainee would normally do, yet pay them far less because of the low-status title. And in turn, firms absolutely beast their trainees. A bit fucked up but that’s business.

(8)(1)

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