Differing fortunes for law firms in first quarter
19 September 2014
- 6.1% increase in fee income for top 100 UK law firms;
- Merger activity most significant driver of overall increase in fee income;
- Largest law firms experience 2.7% reduction in fee income.
The top 100 UK law firms achieved a fee income increase of 6.1%, compared with the same quarter last year, according to the latest quarterly legal sector survey from Deloitte. This was largely driven by merger activity in the last twelve months.
This quarter saw differing levels of performance in the market with firms in the 11-25 category achieving an average growth in fee income of 6.2% while those in the top 10 suffered a reduction of 2.7%. The strong performance for firms in the 11-25 category was achieved through increases in chargeable hours per fee earner of 3.5% and some improvements in rates. The reduction in the 1-10 category was due to a 2.1% decrease in fee earner headcount and a decline in the sterling rates achieved as a consequence of the strong pound.
Jeremy Black, partner in Deloitte’s professional practices team, said: “The market for firms in the 26-100 size category continues to be tough with growth coming from mergers and lateral hires rather than increases in use or rates. While exchange rate movements have hit the global firms this quarter, we would expect the performance of the top 25 firms to improve as the economy picks up. This will continue to widen the gap in underlying performance between the larger and smaller firms.”
Notes to editors
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
Member of Deloitte Touche Tohmatsu Limited