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Clifford Chance

Clifford Chance
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Risk and governance<br />

Risk and governance

Who we are and how we work

We are a single profit-pool, lockstep partnership. Our ambition is to work collaboratively across geographies, practices, product areas and sectors to deliver the best advice and support to our clients and to create a dynamic, rewarding, collegial environment for our people. Our governance aims to support this ambition.

To support our goal of being a successful, sustainable and responsible business, we have clear governance and risk management structures in place.

The Executive Leadership Group, chaired by the firm's Managing Partner, sets the Firm's strategy and oversees its implementation. The effectiveness of the Executive Leadership is reviewed by the Partnership Council, led by the firm's Senior Partner.

The firm's constitution is governed by our Partnership Agreement. This requires that certain issues are subject to a vote of partners, including the election of the Managing Partner, the Senior Partner and the Partnership Council. Partners also vote on the admission of new partners, mergers or acquisitions and other major investments, and changes to the Partnership Agreement itself.  Each partner has a single vote, although on certain matters (such as the arrangements for remuneration of equity partners) only equity partners are entitled to vote.

Governance and managing risk

Executive Leadership Group

The Executive Leadership Group is chaired by the Managing Partner and its members represent the breadth of the firm's services across geographies, as well as senior representatives leading on legal issues, risk, talent, finances and operational execution.

The Executive Leadership Group meets regularly in person and is responsible for our strategy, the development of our competitive position, our relationship with clients, mid and long-term business planning, the performance of the various parts of the firm, and its financial management.

Partnership Council

The Partnership Council is an elected body, chaired by the Senior Partner and currently comprising six other elected members and one external, non-executive member.

The Partnership Council meets regularly in person to review the effectiveness of the firm's leadership and management. The Council also ensures that appointments to leadership roles are handled effectively and with due regard to the interests of the partnership.

Risk management and compliance

This is the responsibility of the firm's General Counsel, who reports to the Managing Partner and Executive Leadership Group. The General Counsel's remit covers conflict management, client acceptance, risk management, compliance, insurance and regulatory or legal issues facing the firm. 

We take a sophisticated approach to risk management and compliance, often setting the standard for our industry. The central team coordinates closely with the managing partners of the firm's offices globally, and others with compliance responsibility around the firm.

Experts in our clearance centres assess all new clients and matters.  We have robust conflict management processes. Conflict laws and regulations vary from country to country; our approach is to apply the rules that apply in the country where the work is to be done.  On multijurisdictional work, we apply the rules of the country where they are most restrictive.

We seek to manage risk proactively: a full annual review of the key risks facing the firm seeks to ensure that appropriate mitigation is in place. Our risk approach is reviewed annually by the Audit Committee.

Financial management

Clifford Chance is a UK Limited Liability Partnership. Every year, we publish on our website summary financial information based on the audited statutory consolidated financial statements of Clifford Chance LLP, prepared in accordance with International Financial Reporting Standards.

Monthly updates on the firm's finances at an office and practice area level are made available to all partners, complemented by a series conference calls where budgets and financial performance are discussed in detail. 

The firm's finances are subject to review by the Audit Committee.

Audit and Risk Committee

The Audit and Risk Committee has six members, including one from outside the firm to provide an independent perspective.  

The Committee reviews and approves the firm's accounts and recommends which firm should be appointed as auditors. It also monitors the firm's risk management processes. It reports to the Partnership Council.

Partner promotions, recruitment, performance management and remuneration

The processes around partner promotion and recruitment are robust and transparent to the partnership. The Partner Selection Group assesses the personal qualities of all candidates to ensure they meet the high professional standards we expect of our partners. The Partner Selection Group reports to the Partnership Council.

The firm has an annual Partner Appraisal process, where each partner has an opportunity to review their contribution, the strategy of their practice and their team, and their wider roles within the firm. The process includes discussion of client reviews and feedback, peer feedback and upward feedback and contribution is assessed against a range of criteria relevant to the firm's mid to long-term ambitions. The firm has express processes for partners who need to improve their performance or practice, including appeal to the firm's Partnership Council if there are any concerns about how performance is being managed.

Partner remuneration is transparent to the partnership. Equity partners are paid a proportion of the firm's profits according to their position on the lockstep. As our equity partners are the owners of the firm as well as executives, their compensation reflects their shareholder dividend as well as pay. Equity partners do not receive options or incentives of any sort and no equity partner has any guaranteed earnings.

Executive Leadership Group members

Partnership Council members

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