Clydes posts 14% revenue hike to pass £500m mark for first time

Clyde & Co has posted a 14% revenue hike for 2016-17 to move above £500m for the first time, marking the firm’s 19th successive year of growth.

The firm took in £508.1m during the 12-month period, up from £447.3m in 2015-16.

Net profit increased by 9% to £127.6m; however, profit per equity partner fell by 2% to £650,000. The firm attributed the dip to an 11% increase in its partner numbers, which rose by 40 to 397. Last year, the firm’s PEP stood at a record high of £665,000.

The increase in partner count came after the firm added five new offices during the course of the year – Miami, Chicago, Washington DC, Mexico City and Duesseldorf.

Clydes also began to see the full benefit of previous expansion in its results, including its first full year of revenues from its merger with Simpson & Marwick, after last year’s results included seven months’ revenue from the Scots firm.

The firm has grown rapidly in recent years, through mergers, lateral hires and organic growth, expanding by a compound average of 12% per annum during the past five years.

In a statement, the firm said that currency movements accounted for 5% of the revenue growth.

Chief executive Peter Hasson said: “The results are pretty much what we have come to expect. The rate of fee income growth stands up to that which has been achieved by others in the market.

“We have seen an expansion in partner numbers as we have expanded our business, but the other thing they show is that we continue to focus on the long term, and we have invested heavily over the course of the year on improving our efficiency. The key thing is to balance the demand of improving growth in a single year and investment for the longer term.

“We have expanded our regional networks, and those partner numbers don’t always come at the same levels of profitability as existing partners. The other factor is that we have seen heavy investment during the course of this year in IT and systems, which comes at a cost.

“We have seen our international business grow by about 25% in the course of the year, and we are now close to a 50/50 UK-international revenue split. Post-Brexit, we see developing our presence in continental Europe as a useful hedge for the business, particularly if the insurance market fragments between UK and Europe.”

Clydes, which was recently named Transatlantic Law Firm of the Year at the Transatlantic Legal Awards, last year appointed insurance head Simon Konsta as its new senior partner following an uncontested election. The firm has had a number of panel successes in recent months, winning reappointments to QBE’s UK claims panel and US insurance giant AIG’s UK panel.

The results come after fellow insurance-focused firm Kennedys posted an 8% revenue increase for 2016-17, with revenue growing from £138.8m to £149.9m.