- Feb 17, 2018
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Clifford Chance
What makes the firm different?
The big firm on the blockWhat makes the firm different?
You can learn a lot about mergers from the combination between Coward Chance and Clifford Turner. The two firms shared complementary practice areas, Coward Chance in banking and Clifford Turner in corporate law. They each had a different international footprint with Clifford Turner in Paris, New York and Tokyo whereas Coward Chance had a greater presence in Hong Kong and the Middle East. And they worked together to form a united brand, Clifford Chance. So whilst others dismissed the combination of two second-tier City firms, the creation of the biggest law firm in Britain would soon take on the magic circle for global domination.
More mergers in the year 2000 with Germany's Pünder Volhard Weber & Axster and New York's Rogers & Wells transformed the newly-formed Clifford Chance into the world's biggest law firm. And whilst the firm didn't quite end the war between British and US firms - the New York merger was a troubled one, Clifford Chance's policy of international expansion prompted many City law firms to play catch-up. In many ways, it was the original one-stop-shop global law firm.
Today, whilst the rest of the magic circle have caught up internationally, Clifford Chance continues to lead the pack in revenue, which rose by 11% in 2016-17.
Private Equity and Finance
Clifford Chance boasts an attractive global private equity practice, which sees it routinely bumping heads with corporate heavyweight, Freshfields, for sponsor-side work. The firm leads the global league table by volume and was recently the highest ranked M&A adviser in Asia for value. So it's no surprise that Clifford Chance won a host of international awards for the year 2016, including European Law Firm of the Year by Private Equity Real Estate and Private Equity International. And whilst the firm saw a number of high-profile funds partners head for US firms, it still boasts a strong US team to complement its private equity practice.
On the other side of the coin, Clifford Chance matches Allen & Overy for its market-leading finance practice.
Global Strategy
The American Lawyer's Global 100 report gives a good sense of Clifford Chance's international presence. Even though London makes up 33% of its revenue, only 29% of Clifford Chance's lawyers are based in the UK, the lowest in the magic circle.
It's also the largest magic circle firm and the third largest international firm in the Asia Pacific. Between 2011 and 2016, revenues in the region increased by 50% and it currently contributes approximately 18% of global revenue. The firm is now targeting 25% and recently appointed five new partners in the Asia Pacific. It also brought in new leadership including representatives from China, Australia and Japan to form a 14-partner team.
Clifford Chance's only base in ASEAN is Singapore after the firm consolidated its Southeast Asia practice in 2017 by ending its alliance in Indonesia and closing its office in Thailand after 22 years. The firm has been present in Singapore for 36 years, where it has a local law practice thanks to its longstanding QFLP licence. It's also able to practice litigation in the region because of its formal alliance with Cavenagh. The firm has been investing in the region - its office headcount doubled between 2010 and 2014, and it now boasts 23 partners. This has helped it win a number of lucrative mandates, as it advised banks on both Singaporean and international law on the flotation of Netlink NBN Trust. Netlink NBN Trust is responsible for much of the broadband infrastructure in the city-state and its 1.7bn listing was the largest in Singapore since 2011.
The firm has allegedly been looking for a merger partner in China for years. It's a risky move, but if any magic circle firm were to do it, it would be Clifford Chance. The firm's investment in the region has seen it party to mega-deals, including its recent role advising the China Investment Corporation in its $13.8bn purchase of Logicor, Blackstone's European Warehouse. At the time, this was the biggest ever acquisition in the Asia-Pacific region.
Meanwhile, Clifford Chance is also ramping up its presence in the US which boasts a sizeable 300 lawyers and 77 partners, a legacy of its merger with US firm Roger & Wells. The firm recently hired 9 partners in the US and Matthew Layton, the managing partner, has said he wants to see headcount rise to 400. The US contributed 13% to its revenue in 2016-17 and Clifford Chance aims to grow that to 20-25%.
Training and People
The firm saw 81% of trainees retained in September 2017, an improvement on its 67% in Spring. Clifford Chance has been reducing the number of trainees it takes on in London since 2010, when it took 136, reportedly the figure will be 'up to 80'. This reflects a broader trend of cost-saving measures to keep up with the market.
It has invested in training programmes including its Continuous Improvement initiative. This is part of its efficiency drive to train all lawyers to adopt these processes in practice.
On a partner level, appraisals are based on a broader range of performance metrics including cross-selling between teams and high-value business. Management is also working on a leadership programme to meet global needs. The firm recently followed the rest of the magic circle in reforming its lockstep to make it easier to reward and retain star partners.
Efficiency drive
The firm has implemented a number of measures to respond to new demands within the legal sector in technology and regulation. Its global head of client services solutions (and former doctor), Oliver Campbell, has invested in a 'Continuous Improvement' practice. This focuses on 'lean' principles, a method derived from the Japanese manufacturing industry, which seeks to minimise waste. Campbell has been integrating Continuous Improvement into Clifford Chance through a number of measures, including bringing in experts to work on projects. In 2014, this method was implemented in over 100 projects and in the 2016 financial year, it provided reported savings of £7m.
The firm has also adapted to provide cost-effective legal services to clients. It was one of the first major law firms to offshore to India when it opened two centres in 2007. This contrasts with magic circle rivals who've chosen to onshore or nearshore to Manchester, Birmingham and Belfast.
This is now complemented by Clifford Chance's recent acquisition of Carillion's Advice Services, the legal services branch of Carillion, which recently entered liquidation. The firm fended off 20 buyers to secure the low-cost centre, together with a team of 60 paralegals, who've been working on low-cost legal work such as compliance services, document review and due diligence, for Carilion. The centre also has the benefit of existing expertise in legal tech, AI systems and existing clients.
Technology and Innovation
Meanwhile, a team of 400 lawyers from different parts of the firm, are involved in Clifford Chance's new tech group. The team has been assembled amid growing innovation within financial technology and legal technology, and client concerns over the incoming General Data Protection Regulation (GDPR) in May 2018.
Clifford Chance has also invested in AI in a number of cost-saving measures for its existing clients. This includes Kira Systems, a document review technology, which is being used in due diligence; and Neota Logic, an automated toolkit used by clients to navigate derivatives regulation, and which is now being used for MiFID II; and finally, CC Dr@ft, which allows in-house clients to build their own contracts.
