Osborne Clarke has kicked off this year’s financial reporting season, revealing a 9% international revenue increase from €407m in 2022 to €442m in 2023, which the firm sees as real progress against the backdrop of weaker global economic conditions and a stagnant deals market.
In the UK, the firm’s income also grew by 9% from £199.1m in 2022 to £217.3m, which is a notable contrast to last year’s revenue increase of 19% and 20% respectively for international and domestic growth, and an indicator of the obstacles that many firms are facing.
And, although OC’s international revenue is up, its UK net profit has decreased slightly from £77.2m to £74.7m. That means PEP was down 14% to £687k, compared to last year’s £796k, which was an 11% increase on 2021.
Speaking to Legal Business, UK managing partner, Conrad Davies (pictured), said: ‘We were expecting more growth in 2022 but we had a difficult second half of the year, which was reflective of the rest of the market. We remain a firm with a heavy transactional element. Market conditions dipped last year in corporate, real estate and finance, thanks to the economy, the Autumn Budget, inflation, Ukraine, etc. It meant that the transactional market was not as good as we expected it to be. However, we saw an uptick in trading by the end of our financial year.’
Asked about the deceleration of the rate of growth from 20% in 2022, to 9% in 2021, Davies responded: ‘It would be remarkable for a firm our size to deliver a 20% growth year on year. Double-digit growth is our goal, which I would expect when we look at the next 2-3 years to deliver.’
Davies discussed the firm’s highest-performing areas and its lateral hiring strategy: ‘We have had a strong year in our disputes team, which we have bolstered from a sector perspective through the hiring of Trevor Crosse [from Marks & Clerk] in life sciences. Data is also one of our key strategic areas of growth, which we have strengthened by hiring data protection partner Jonathan McDonald [from Charles Russell Speechlys].’
He added: ‘Disputes is fabulous; you would expect it to be strong, but it has well outperformed our expectations. The tax and pensions team have also done well. But we are a heavily transactions-based firm, and we are hoping to see those teams come out strong in the Autumn.’
Osborne Clarke’s 2023 financial results also reveal adjustments to its remuneration structure, with an increase in long-service awards, ranging from £2,000 for a ten-year anniversary, to £10,000 for 50 years, as well as introducing a discretionary long-term incentive plan with up to 40% of individual salaries paid as bonuses over three years, based on high performance.
Davies said: ‘These adjustments reward long service and loyalty to the business, building upon our strategy and making sure that people are delivering excellence that is rewarded and enhanced.’
Last year, in recognition of the firm’s outstanding financial performance, all UK staff were given a 5% profit share bonus based on annual salaries, with a minimum payment of £2,500, while individual performance-based cash bonuses were increased to 25% of base salaries. However, this year the staff bonus has been dropped to 4%, with a minimum payment of £2,000.
Davies commented: ‘What we could have done was said, “Okay, we have had a difficult year, we are not giving a staff bonus,” but we are really pleased to commit to the 4% level and the £2,000 minimum payment.’
