Top 50 law firms pushing profits to an all time high . . .
The UK's top law firms have overcome continued uncertainty in the global economy to achieve a second consecutive year of growth, while top 50 firms push partner profits back towards a boom-time high.
Legal Week's 2011-12 results show that revenues across the top 50 have hit £12.96bn - 5.6% up on the equivalent 2010-11 figure of £12.27bn. Top 50 law firms averaged income growth of 7.7% over the year. However, much of the revenue growth was driven by consolidation, with five firms in this year's top 50 significantly adding to their fee income through domestic or international mergers. Four of the fastest-growing firms by revenue undertook substantial mergers, including DLA Piper and Clyde & Co, with consolidation contributing to a 6% increase in total partner numbers across the top 50. Firms on average grew profits per equity partner (PEP) by 4.2%, pushing average PEP across the top 50 to £587,000, against an all-time high of £616,000 in 2008. In contrast, the magic circle were relatively subdued performers, seeing turnover and PEP growth of 2.1% and 1.6% respectively. Clifford Chance had the best year of the group, posting increases in revenue and PEP of roughly 7%. The magic circle has now performed below the top 50 trend in income and PEP growth for three years running, though the five elite London firms' average PEP of £1.3m remains more than twice that of the top 50 as a whole.
Slaughter and May senior partner Chris Saul commented: "The macro-environment has, of course, been really challenging and, against that backdrop, law firm results which we have seen have looked encouragingly robust. This year has seen some law firm consolidation and, with the likelihood of on-going economic uncertainty, it would not be surprising to see that continue."