Osborne Clarke news, updates and analysis | Page 1 of 8

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.’

Ayesha.ellis@legalease.co.uk

Osborne Clarke (OC) has joined the slew of firms reporting robust financials, today (13 June) unveiling a 19% increase in overall turnover from €341m to €407m.

And in an endorsement of the UK market, domestic revenues jumped 20% from £166.4m to £199.1m. Profit per equity partner (PEP) also saw a notable increase, climbing 11% from £714,000 to £796,000.

The upturn in revenues outpaces last year’s showing, when the firm rallied after a tough Covid period to record a 7% international revenue increase, with an 8% rise in UK income.

Omar Al-Nuaimi (pictured), OC’s international chief executive, admitted he was ‘surprised’ by the level of growth. He attributed the growth to: ‘Investments paying off, which have enabled us to keep investing in lateral partners.’

The firm also conceded it was operating under ‘favourable’ market conditions, but nonetheless pointed to a new 30-strong team in Poland that boosted its European practice, increasing client relationships with its US platform and growing ‘aggressively through lateral hires’ globally.

In terms of lateral hiring highlights, OC welcomed energy partner Hugo Lidbetter from Fieldfisher and payments partner Paul Harris from Linklaters in January, and added three energy and utilities partners in John Deacon, Dominic O’Brien and Hannah Roscoe from Orrick in March. The firm also made eight partner promotions in the UK during the year, three of which were women.

Such concerted investment would explain the relative slowing of PEP increase – while this year’s 11% rise is immodest, it was bettered by last year’s 16% surge in PEP. Ray Berg, UK managing partner, told Legal Business: ‘PEP is a dark art! But the fact that we’ve managed a double-digit growth while making such investment is something we’re proud of.’

Berg reported that growth was across the board in terms of practice areas, which was backed up by the numbers. The firm’s ‘business transactions’ unit saw the highest rate of growth at 27%, underlining the general liveliness of transactional markets. Projects, real estate and finance grew at a similarly pacey 25%, the advisory practice increased 15% and disputes and risk was up by 8%.

In recognition of the strong performance, in June OC will be giving all its UK staff a 5% profit share bonus, based on annual salaries. The minimum payment will be £2,500, up from £1,500 last year. Performance bonus payments have also been increased to 25% of base salary.

Berg concluded: ‘Reward is closely tied to personal growth and well-being, so we’re looking at how we competitively reward our people. From transparent base pay and enhanced bonus payments, to recognition of long-serving employees and increased pensions contributions, we feel incentivising our top performers and valued employees is a big part of being a responsible business.’

Tom.baker@legalease.co.uk

Osborne Clarke has rallied in the face of last year’s Covid-hindered financials to record a 7% international revenue increase to €341m as UK profit and profit per equity partner (PEP) saw double-digit elevations for 2020/21.

The global revenue increase from last year’s €318m means turnover has grown a respectable 55% over five years. OC’s UK showing has also received a shot in the arm from last year when the firm posted a subdued 3% revenue increase to £155m from £150m, while UK net profit diminished by 5% to £59.8m from £63m.

In 2020/21, UK revenue increased by 8% to £166.4m, outstripping global performance, while UK net profit saw a pacey 14% hike from £59.8m in 2019/20 to £67.9m.

A 16% surge in PEP to £714,000 more than reversed last year’s 12% drop to £614,000, when significant investments in both its people and infrastructure and partner investments were cited as the reasons for the drop. OC said it continued to strengthen its financial stability with increasing cash resources to £41.1m, up 14% on 2019/20.

Ray Berg, UK managing partner (pictured), paid tribute to the firm’s people, supporting clients, colleagues and the business through one of the most volatile periods it had ever experienced and a year that has been ‘mentally taxing’.

Speaking to Legal Business, Berg was cautiously sanguine: ‘Everyone in the business has worked flat out and there’s a huge sense of fatigue, but to see the way people have responded in a true OC manner, bringing out the best in our values, has just been fantastic. I’m not going to deny, this is a great set of numbers, but they’re almost secondary when you consider where we were a year ago and the huge uncertainty facing the business and our people.’

Omar Al-Nuaimi, OC’s International CEO, pointed to a number of highlights since the introduction of OC’s 2020 strategy, including 9% year-on-year growth in the international business since 2015/16 and increasing multijurisdictional clients – those served in five or more jurisdictions – by 83%. OC has also now passed 2,000 people internationally. ‘We’re proud of our innovative reputation and we plan to keep that spirit alive with a shared vision going forward,’ he said.

At the start of the year, Osborne Clarke launched a new future-focused three dimensional client plan that combines legal expertise, sector understanding and transformational insight across three international drivers of change: decarbonisation, digitalisation and urban dynamics. Berg pointed to the hire of the firm’s first head of inclusion and corporate responsibility, Bola Gibson, as a key development, along with the pandemic’s role in crystallising the importance of such issues. ‘I’ve always said that diversity and inclusion, including wellbeing, would be one of the things our clients and our people measured us on. If ever anyone needed convincing of the business imperative of that, the last 12 months have proved it. Equally, decarbonisation and showing you’re a sustainable business. You’ve got to have an answer that goes beyond the tick box response and it’s genuinely embedded to what you do as a firm.’

The firm’s largest sector, technology, media and communications grew 21%, followed by retail and consumer increasing by 16%, energy and utilities up 8%, financial services up 7%, while other sectors were broadly flat but against strong performances in 2019/20.

In the UK, disputes and risk saw 14% growth, business transactions increased by 9%, projects, real estate and finance grew 3% and advisory by 2%.

Notable UK laterals for the year include that of London real estate partner Richard Wilkinson from DLA Piper; Michelmores London restructuring and insolvency partner Douglas Hawthorn; Tim Harris, patent litigation partner from Bird & Bird, and technology and life sciences-focused venture capital partners – Rob Hayes and Justin Starling – who joined in Reading along with their team from Penningtons Manches Cooper. The firm also promoted 12 international partners in the last year.

Berg noted that, while the economic indicators for the firm and its clients appear positive, other significant challenges could potentially cloud the horizon.

‘If I’ve got one concern it’s the personal impact this has had on everyone. We won’t really know the extent of that for a few months to come. On one level, remote working has been great because we’ve seen a backdrop to every individual’s personal life we would never have seen before, but equally you get a certain picture with a virtual veneer, which makes it harder to really understand what people are dealing with.

‘Layer onto that the war for talent, which is really going to have to make law firms be very clear on what they are about. If people are stuck at home who joined OC because of its wonderful culture that they’re not physically experiencing, the lure of a huge US salary becomes a very attractive proposition. That goes back to making people want to come into the office.’

nathalie.tidman@legalease.co.uk