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It’s that time of year again, when reports about U.S. firms’ prior-year performance begin to emerge before the annual printing of the Am Law 100 and 200 lists. Absent from those lists are firms that do not meet the full criteria for Am Law inclusion, but would qualify based on their standalone U.S. financial performance. This diverse group of firms (see Figure 1) includes former Am Law 200 firms which no longer meet the Am Law criteria (like Dentons), global firms based outside the U.K. (like Clyde & Co and Eversheds Sutherland), and four firms within the U.K.’s prestigious Magic Circle group. All of these firms have large U.S. footprints and U.S. practices which could rival Am Law firms in revenue and profitability. Typically though, we hear very little about the U.S. practices of these firms. The reason for this is simple – most of these firms don’t provide much clarity into the performance of their U.S. practices. In this regard, Clifford Chance is unique.

As with most firms of its size, Clifford Chance publishes its global financial results each year. Unlike most firms, however, it also releases a breakdown of the firm’s financial performance in each global region. In addition to these public disclosures, Clifford Chance went one step further this year. The firm provided ALM Intelligence with data on the growth and profitability of its Americas practice since 2010. An analysis of that data provides useful insight into the firm’s performance in the U.S. It also raises questions about the long-held belief that U.K. firms have struggled to develop a sustainable footprint in the U.S. Clifford Chance’s U.S. footprint certainly looks sustainable – perhaps even thriving.

Based on the results of Clifford Chance’s Americas practice – which currently includes 200 lawyers in New York City, 58 lawyers in Washington, D.C. and a small 9-lawyer office in São Paulo – the firm had revenue of $262 million in the fiscal year ending on April 30, 2017. Put into the context of Clifford Chance’s global firm, the Americas practice earned 13 percent of the firm’s total revenues last year. Had Clifford Chance’s Americas practice been included in the Am Law rankings, it would have been ranked 119th by revenue and 55th by revenue per lawyer. With less than two months to go in its current fiscal year, Clifford Chance is projecting that the firm’s Americas practice will post 7 percent growth in both revenue and revenue per lawyer this year, while maintaining a steady headcount.

The first takeaway from this data is that Clifford Chance’s Americas practice is fairly large by the standards of foreign practices of global firms. The success of U.S. firms in London has gotten significant attention in recent years. While a recent analysis suggests the upbeat narrative on U.S. firms’ performance in London may be overblown, some U.S. firms have done exceedingly well in the U.K. White & Case, the largest U.S. firm in London, earned $290 million from its U.K. practice last year. Latham & Watkins earned $280 million. By the standards of these firms, Clifford Chance’s Americas practice has been relatively successful. It is larger than nearly all of the U.S. firms in London, with the exception of White & Case (see Figure 3). Additionally, its revenue per lawyer compares well with Latham’s U.K. practice. The main difference between Clifford Chance’s performance in the U.S. and the performance of leading U.S. firms in London is growth. White & Case has grown its London headcount by 42 percent since 2011. Latham has grown by 46 percent. Meanwhile, Clifford Chance’s Americas practice has grown by a more modest 8 percent.

A second area of analysis which provides some insight into Clifford Chance’s Americas practice is a look at how their performance benchmarks against U.S. firms. This raises an interesting question – who exactly is Clifford Chance competing against in the United States? There is a temptation to compare them against other leading global firms like Latham and Kirkland & Ellis. Both of these firms, similar to Clifford Chance, are large, global, based outside of New York, and have built a strong presence there. Beyond those shared characteristics, however, the comparison doesn’t fit very well. Clifford Chance’s U.S. revenue per lawyer is 20 percent lower than Latham’s and 45 percent lower than Kirkland’s. This difference in revenue per lawyer points to a more fundamental difference between these firm’s U.S. businesses. Clifford Chance’s U.S. strategy is not predicated on winning a large number of high-end domestic public M&A deals. The firm has decided, at least for now, that the U.S. market has too many competitors in that space to justify the existing volume of work. Instead, Clifford Chance has chosen to build strength in several specific areas where it sees a stronger business case.

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Nicholas Bruch, Director, ALM Intelligence

Nicholas is a Director at ALM Legal Intelligence. He is ALM’s principle analyst for the legal market and is the Director of the ALM Intelligence Fellows Program. Nick’s research on the legal market is regularly featured in The American Lawyer and other industry leading media outlets. Nick also speaks extensively on the legal market, keynoting major industry events and speaking at partner retreats for large and mid-sized law firms. Prior to joining ALM Legal Intelligence, Nick was part of Huron Consulting’s Law Firm Strategy Practice in the firm’s New York and London offices. Nicholas’s experience includes advising law firms and law department in developing and developed markets on issues related to strategy, business development, market intelligence, and operations. Nick holds a Masters of International Business from the Fletcher School at Tufts University and a BA in Economics and Philosophy from DePaul University.

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