Clifford Chance LLP
Clifford Chance LLP
Founded: 1802 as Anthony Brown
Sales: $1 billion (2000 est.)
NAIC: 54111 Offices of Lawyers
Clifford Chance LLP is the world’s largest law firm, based on its approximately 3,000 lawyers operating in some 30 offices. That status is based on two events. First, in 1987 it became England’s largest law firm with the merger of Coward Chance and Clifford-Turner. Then in 2000 it merged with New York City’s Rogers & Wells and Germany’s Punder, Volhard, Weber & Axster. This unprecedented consolidation of law firms is one approach to globalization and the increasing number and size of multinational corporations. Clifford Chance’s predecessor firms that dated back to 1802 served corporate, individual, and government clients throughout the British Empire, including India, Africa, Australia, and the Middle East. In 2000 some of its long-term clients included Citibank, Midland Bank, Fujitsu Europe, Panasonic UK, and Sumitomo Bank. Although smaller law firms remain competitive with this consolidated colossus, only time will tell if bigger is better. In any case, Clifford Chance is breaking new ground in the history of the legal profession.
Coward Chance: Predecessor Firms in the 1800s
In 1802 Anthony Brown became the first lawyer in his family when he started a solo law practice in London. In 1809 Parliament passed a bill that Anthony Brown wrote to incorporate the Kent Water Works Company (until 1844, Parliament had to approve all incorporation requests.)
Brown became one of the city’s most prominent solicitors and community leaders and, in 1826, was elected London’s Lord Mayor. Meanwhile his firm was growing by representing railroads after the English first invented that new form of transportation in the early 1800s. In the 1830s the Brown law firm also represented some banks that financed the growing business community and continued to get regular work from the Kent Water Works Company.
After Parliament passed The Joint Stock Companies Act in 1844, many more businesses incorporated because they could simply file papers with the government and no act of Parliament was required. That of course stimulated the growth of the nation’s banks and law firms. For example, in 1863 the partnership then known as Thomas & Hollams helped establish the East London Bank, later renamed the Central Bank of London that in 1891 merged with the Birmingham & Midland Bank to become the Midland Bank. Other banking and financial clients included William Brandt’s Sons & Co. formed in 1805, Frederick Huth & Co. started in 1809, Schroders, the National Discount Company organized in 1856, and the Imperial Bank of Persia, the firm’s major overseas banking client that was formed in 1889.
As a leading London law firm, the predecessor to Coward Chance played an important role in serving the nation’s growing international interests. The United Kingdom in the 19th century ran the world’s largest empire, with colonies such as Canada, Hong Kong, India, Australia, and New Zealand.
In 1888 the firm then known as Hollams, Son & Coward represented the London Produce Clearing House (LPCH) formed by several of the city’s brokers to trade sugar and coffee. The following year tea, wheat, and maize (corn) were added. The Hollams before 1888 had counseled some of the backers of the LPCH, including Carey & Brown, Rucker & Bencraft, and William Brandt’s Sons & Co. Other founding sponsors of LPCH included Barings, Hambros, and the Rothschilds, probably Europe’s wealthiest family based on its international system of banks in Frankfurt, London, Paris, Vienna, and Naples, Italy. Since 1953 the LPCH has been known as the International Commodities Clearing House.
Other clients with international ties included David Sassoon & Sons and also E.D. Sassoon & Sons. Started in Bombay, India, these companies later had offices or operations in London, Shanghai, Baghdad, and Japan to buy and sell tea, spices, silk, dried fruit, opium, and Indian cotton. Insurance clients in the late 1800s included the Universal Marine Insurance Company, the Marine Insurance Company, and the Commercial Union Assurance Company. Such insurance companies protected trading and shipping companies against losses from theft, fires, natural disasters, and shipwrecks.
In South Africa the law firm represented Cecil Rhodes and his many companies that dominated the diamond mining industry in that area, including the De Beers Consolidated Mines Ltd. and the British South Africa Company. The firm assisted Rhodes when he was investigated by the House of Commons, administered Rhodes’s estate after he died in 1902, helped set up the famous Rhodes Scholarships, and then continued in the years ahead to counsel the Rhodes Trust.
Another prominent client around the turn of the century was Guglielmo Marconi and his companies. After the Italian government rejected Marconi’s newly invented wireless telegraphy using radio waves, the inventor moved to England in 1895. In 1897 the law firm accepted him as a new client and soon helped him with his Wireless Telegraph and Signal Company and the Marconi International Marine Communication Company.
Coward Chance in the 20th Century
The law firm continued to represent the Midland Bank in the early 20th century. For example, its client opened a branch bank in St. Petersburg, Russia, in 1917. After the new Communist government took over Russian banks, the London law firm helped Midland as several persons filed lawsuits to get their money back. Midland Bank was one of the world’s largest banks before World War II.
Meanwhile, the firm began representing the Commonwealth of Australia during World War I. During the 1930s and even after World War II, the state government of Hyderabad used the firm for legal advice as India prepared for independence. Unfortunately, Nazi bombers in 1941 destroyed almost all firm records.
Coward Chance in the early 1950s began representing the Standard Oil Company of California that later became Chevron. In the 1950s the firm worked on agreements that facilitated oil exports from Iran, and in the 1960s it provided legal counsel for companies extracting oil just discovered in the North Sea. In addition to serving the Midland Bank as it expanded after World War II, Coward Chance began representing American and Japanese banks that either started or restarted London operations.
In the postwar era Coward Chance continued to serve trade associations such as the National Association of British and Irish Millers as they dealt with the Restrictive Trade Practice Act of 1956 and also the United Kingdom’s 1973 entry into the European Economic Community (EEC). In 1973 the law firm opened its branch office in Brussels, the headquarters of the EEC.
Meanwhile, the general trend of decolonization brought more legal challenges to Coward Chance lawyers. For example, when Zambia became independent in October 1964, the firm’s client the British South Africa Company still had not negotiated an agreement. Finally, in December 1964 the company agreed to give up its mineral rights in Zambia in return for compensation from both the Zambian and British governments.
Clifford-Turner: Origins and 20th-century Practice
Harry Clifford Turner in 1900 was admitted as a solicitor in London, where his firm was named H. Clifford Turner & Co. In 1906 the firm was the solicitor for the Amalgamated Motor Bus Company, Limited, when it issued its first public stock offering. During World War I, the partnership began serving the Dunlop Rubber Company, which remained a client into the 1980s.
- Anthony Brown begins his law practice, the predecessor of Coward Chance, in London.
- Brown & Marten is formed.
- Brown & Marten is renamed Brown, Marten & Brown.
- The firm becomes known as Brown, Marten & Thomas.
- The firm is renamed Brown, Thomas & Hollams.
- Thomas & Hollams becomes the new firm name.
- Hollams, Son & Coward is formed.
- Hollams, Sons, Coward & Hawksley is organized.
- H. Clifford Turner & Co., the second predecessor firm, is founded in London.
- The Clifford Turner firm adopts the new name Clifford Turner & Hopton.
- Hollams, Sons, Coward & Hawksley is renamed Coward & Hawksley, Sons & Chance.
- The Coward firm is renamed Coward, Chance & Co.
- The Clifford Turner firm is renamed Clifford-Turner, Hopton & Lawrence.
- Clifford-Turner becomes Clifford-Turner & Co.
- The Coward firm’s name is simplified to Coward Chance.
- Coward Chance opens its first overseas office, in Brussels.
- Clifford-Turner & Co. is simplified to Clifford-Turner.
- Coward Chance and Clifford-Turner merge to create Clifford Chance.
- Clifford Chance becomes the world’s largest law firm after mergers with New York’s Rogers & Wells and Germany’s Punder, Volhard, Weber & Axster.
In the 1920s the firm prospered, with profits peaking in 1927 at £60,000. At the time the firm had just three partners. Major clients before World War II included the British Foreign & Colonial Corporation (BFC), and the British General Insurance Company. Imperial Airways, Limited used Clifford Turner from its formation in 1924 to the time it was acquired in 1940.
Although the firm’s corporate practice declined during the 1930s depression, the firm’s profits and number of partners increased. It received vital cash flow from its workmen’s compensation cases and its work with various other accident victims. Representing businesses that were forced into receivership was a mainstay of the firm’s work during the 1930s.
In the early post-World War II era, Clifford Chance received considerable work from the Labour Party’s fulfillment of its promise to nationalize several private industries. For example, the government used the law firm in 1948 to acquire the National Omnibus and Transport Company. New merchant banking client S.G. Warburg & Company kept the firm busy. With its practice increasing, the firm in 1950 approved a more formal structure with five departments: company, conveyancing, trust and probate, taxation, and litigation. By 1961 the firm had 16 partners, and the following year it opened its first overseas branch in Paris. In 1972 Clifford Chance opened an Amsterdam office in cooperation with a well-known Dutch law firm.
The 1987 Merger: Clifford Chance in the Late 20th Century
In 1987 Coward Chance with 358 lawyers merged with 278-lawyer Clifford-Turner to create the new firm of Clifford Chance. This union brought together two firms with different strengths. Coward Chance had a strong banking practice, while Clifford-Turner’s forte was in the corporate field. In spite of wagging tongues and critics who doubted the merger would work, legal journalists in the early 1990s agreed it was a successful amalgamation.
Because the newly merged firm had offices in eight London buildings, making shuttle buses necessary, it decided to lease a new headquarters. In the fall of 1992 the firm moved to new offices that Karen Dillon in the June 1993 Legal Business described as “spectacular” by London’s traditional standards. The new facility, with towers of 17 and 7 floors, featured 74 meeting rooms to serve the firm’s 2,000 employees and its clients.
The 1987 merger stimulated the firm to increase its international competitiveness. By May 1993 the firm had almost doubled its number of attorneys to 1,192, making it the world’s second largest law firm, following Chicago’s Baker & Mc-Kenzie with 1,642 lawyers. Just two years earlier, based on annual revenues, Clifford Chance ranked fourth in the world with about $315 million.
In March 1992 Clifford Chance made a major decision that received considerable attention in both British and American legal periodicals. The firm hired Nancy Jacklin to work in its New York office, “the first American partner hired by Clifford Chance,” wrote Karen Dillon in the American Lawyer in May 1993. That move “broke an unofficial understanding between some of the top U.S. and British firms. They would not directly challenge each other on their home territories by setting up offices to represent local clients on matters involving local law. That way British and American firms could refer work to one another without having to worry that clients would be poached.”
That angered some lawyers in top New York law firms, while others welcomed the new competition on their home turf. Some New York law firms, of course, were already operating in the same manner. For example, New York’s Coudert Brothers law firm employed several lawyers in its London office to practice British law.
Meanwhile, Clifford Chance built up its practice in continental Europe. Its Amsterdam office was that city’s second largest foreign office in the early 1990s. About the same time, it opened offices in Moscow, Warsaw, Frankfurt, Barcelona, and Rome.
For its work on three of the top 12 Asian mergers and acquisitions in 1999, Clifford Chance was named “Asia’s M&A Law Firm of the Year” by the International Financial Law Review in early 2000. Clifford Chance won this honor for the third straight year.
Creating the World’s Largest Law Firm
Effective January 1, 2000, Clifford Chance merged with New York’s Rogers & Wells and Germany’s Punder, Volhard, Weber & Axster to create the world’s largest law firm, known as Clifford Chance Rogers & Wells in the Americas and Clifford Chance Punder Volhard Weber & Axster in some nations of continental Europe. The merged firm included about 3,000 lawyers worldwide. It maintained offices in New York, London, Sao Paulo, Washington, D.C., and Dubai. Its continental European offices were located in Amsterdam, Barcelona, Berlin, Brussels, Budapest, Dusseldorf, Frankfurt, Leipzig, Luxembourg, Madrid, Milan, Moscow, Munich, Padua, Paris, Prague, Rome, and Warsaw. Its Asian offices were in Bangkok, Hong Kong, Shanghai, Singapore, Tokyo, and Beijing.
Rogers & Wells had been started in 1871 with the law practice of Walter S. Carter. The New York firm was named for William P. Rogers, President Eisenhower’s attorney general and secretary of state under President Nixon, and the late corporate lawyer Jack Wells. The American Lawyer (July 1999) ranked Rogers & Wells as the 47th largest U.S. law firm, based on its 1998 gross revenue of $214 million. At that time Rogers & Wells employed 366 lawyers.
The merger between Clifford Chance and Rogers & Wells was the first transatlantic union of two major firms. For years some had speculated about the possibility of a New York and a London firm merging. “I think it’s inevitable that we’re going to see a transatlantic merger of some significance—probably in the next year or two,” said consultant Ward Bower in the American Lawyer of December 1996.
Intense competition among various large firms in the two cities had occurred for many years. In addition, law firms in the 1990s competed with the Big Six international accounting firms that employed thousands of tax lawyers.
The 2000 mergers that created Clifford Chance as the world’s largest law firm were part of the consolidation trend occurring in an increasingly globalized economy. With the rise of multinational corporations, the European Union, the North American Free Trade Agreement, and electronic commerce conducted on the Internet, national borders lost economic significance and many firms of all kinds merged to be able to compete in the larger world markets.
However, not all big law firms chose the consolidation strategy. They argued that the quality of their lawyers was more important than the quantity found in a firm like Clifford Chance. Regardless, big law firms continued to grow, whether by mergers or internal hiring. In light of the difficulties mergers faced, including leadership challenges and differences in corporate cultures, the wisdom of the 2000 Clifford Chance mergers remained to be seen.
Principal Operating Units
Corporate; Banking and Finance; Capital Markets; Real Estate; Litigation and Dispute Resolution; Tax, Pensions and Employment.
Bose, Mihir, “Clifford Chance: A Very Peculiar Practice?” Director, March 1990, pp. 65-66, 68, 70.
Dillon, Karen, “The British Empire Strikes Back,” American Lawyer, May 1993, pp. 52-56.
——, “Playing for Stakes: The Game of Clifford Chance,” Legal Business, June 1993, pp. 28-31.
“Merger in the First Degree: British Law Firms Are Forging New Relationships That Could Transform the Style of Global Legal Practice,” Time International, August 9, 1999, p. 41.
Morris, John E., “The New World Order,” American Lawyer, August 1999, pp. 92-99.
——, “London Braces for the Big Six Invasion,” American Lawyer, December 1996, pp. 5-6.
Page, Nigel, “Managing Nicely: Will the Real Geoffrey Howe Step Forward,” Legal Business, June 1991, pp. 15-20.
Rice, Robert, “At the Heart of Europe,” Financial Times, August 17, 1993.
Rose, Craig, “Clifford Chance: The Merger That Worked,” Commercial Lawyer, Issue 15, 1997, pp. 32-34.
Scott, John, Legibus, London: Clifford-Turner, 1980.
Slinn, Judy, Clifford Chance: Its Origins and Development, Cambridge, England: Granta Editions, 1993.
Steinberger, Mike, “Is Clifford Chance/Rogers & Wells the Next Wave, or Simply Overkill? Big Transatlantic Legal Merger Sparks Fierce Debate on Global Strategy,” Investment Dealers’ Digest, August 9, 1999, pp. 12-13.
—David M. Walden