The #MeToo Movement Is Keeping London’s Top City Lawyers Busy

(Bloomberg) -- The global #MeToo movement, in which women across much of the corporate world have spoken out about sexual harassment at work, is having an unintended consequence: more work for top city lawyers.

Clifford Chance, one of London’s leading “magic circle” law firms, saw profits rise 2% in the 12 months ending April 30, it said Tuesday, with growth in a range of areas including advising on private equity and pension fund investments. There’s been a “significant increase” in clients looking for advice on how to handle sexual harassment allegations and prevent future cases, the firm’s global managing partner, Matthew Layton, said in an interview.

Since the #MeToo movement began in 2017, companies “have really been holding a mirror up to themselves” to make sure they’re prepared to handle any allegations that may emerge and to prevent harassment, Layton said. “That’s led to clients turning to us to help them.”

The firm’s 2% profit growth, to 637 million pounds ($804 million), marks a slowdown from a 13% rise reported a year ago, in part because of extra investment in upgrading the firm’s infrastructure and its cyber defense systems. Revenue from advising financial investors such as private equity funds and asset managers grew by more than 20% in the period to April 2019.

“They’ve got significantly increased pools of capital to invest and deploy,” and are seeking advice on “the regulatory and legal framework around the world” for raising funds and making investments, Layton said.

It’s the first of the so-called “magic circle” firms to report results this year, with rival Freshfields Bruckhaus Deringer LLP due to report this week and Allen & Overy and Linklaters next week. Uncertainty about Brexit and trade tensions between the U.S. and China have dampened business confidence and investment, hitting the law firm’s revenues, but they’ve “also created opportunities as clients have turned to us to help them navigate the turbulence,” the firm said.

Leading law firms “will have had a decent, if not spectacular year,” said Tony Williams at legal consultancy Jomati, speaking before the results were published.

While activity in the global mergers and acquisitions market -- which has historically driven revenues at the elite London firms -- has “come down a bit” outside of the U.S., work on litigation and arbitration has been “quite strong” and there’s been demand for law firms’ advice on investigations into money laundering and compliance with regulations on sanctions and bribery rules, he said.

The impact of any extra work advising on harassment allegations may be limited, he said, because work on employment law isn’t generally a “mover of the dial” for magic circle firms.

Horacio Bernardes Neto, president of the International Bar Association that represents attorneys, said in May that law firms hired to advise corporations on how to handle harassment allegations needed to get their own hiring and workplace behavior in order because of the risk being called out for hypocrisy, after a global survey found one in three female attorneys has been sexually harassed at work.

To contact the reporter on this story: Kaye Wiggins in London at kwiggins4@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser

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