Elite City firms drag down financial figures of top 100
London’s elite commercial law firms dragged down the financial performance of the UK’s top 100 practices over the last year, figures published today revealed.
At the top ten law firms in the Square Mile – which includes the group of five so-called magic circle players – revenue increased on average by just 3.3 per cent in the quarter that finished at the end of October from the same period in 2016. The best performing firms were in the mid-tier bracket, with average fee income rising by nearly 10.5 per cent for the 26th to 50th largest practices.
The figures from the annual survey of the top end of the legal profession conducted by the “big four” accountancy firm Deloitte showed that the top ten firms also trailed the rest of the group of 100 in the percentage rise in average fees per individual fee-earner. They managed to increase fees by only 3.6 per cent, while again the firms in the 26-to-50 bracket were the best performers, with a 9.4 per cent average rise.
Individual partners at the top end of the City’s law firms performed slightly better than fee earners as a whole. They generated a 4.3 per cent rise in fees, but the biggest rise in individual partner fees came at the bottom of the group, the 50-to-100 bracket, where fees rose by 7.6 per cent.
The research provided statistical backing for assumptions in the City that the top firms have put a lid on overheads in the aftermath of the UK’s vote to leave the EU. Figures showed that the top ten practices had slightly reduced the number of fee earners on their books, albeit by just 0.2 per cent.
The biggest rise in fee-earner headcount came in the 11-to-25 bracket, with those firms increasing numbers by nearly 3 per cent. But the overall average across the top 100 legal practices remained more or less flat, rising by just 1.4 per cent.
Analysts at Deloitte argued that the data demonstrated that the UK’s biggest firms had successfully increased their fee income by cracking down on lawyers writing off billable hours. Despite the relatively sluggish figures at the top of the table, Jeremy Black, a partner at Deloitte, described the figures for the last quarter as “strong”, saying they “build on a solid start to the year”. “The level of performance has been stronger than many firms expected at the beginning of the year,” he said. “While there is a high level of uncertainty, for the moment many firms are performing well.”