Law firms deliver strong performance in FY18
22 June 2018
- Top 100 law firms achieve average fee income increase of 7.7% in FY18;
- Fees per fee earner up by 5%;
- Firms forecast fee income growth of over 5% for FY19.
The UK’s largest law firms delivered a strong finish to the year with an average increase in fee income of 8.7% in the final quarter. This resulted in an overall increase of 7.7% for the year ended 30 April 2018 (the most common financial year end for UK law firms), according to Deloitte’s latest Quarterly Legal Sector Survey.
Despite some general uncertainty in the economy, across the Top 100 firms the year has been a strong one with the average performance being much stronger than many anticipated.
Fee income increased across all size categories, with firms in the 11 - 25 and 26 - 50 size categories reporting the highest growth rates (11% and 9% respectively) and growth for the largest firms (those in the 1-10 size category) and the firms in the 51-100 size category being more modest, but still strong at 4% and 6% respectively.
The strong growth in fees per fee earner of 5% was achieved through a roughly equal contribution from increases in chargeable hours per fee earner and rates recovered, with the balance of the fee income growth being due to a 2.5% increase in the average number of fee earners at firms in the survey.
Jeremy Black, partner in Deloitte’s professional services practice, said: “While the overall performance of firms in the sector has been very strong we are seeing huge variances in the performance of individual firms. There are some firms who have had one of their best years ever, while others are struggling.”
The survey also found that while firms are not expecting to achieve rates of growth quite as strong as those achieved this year, they are forecasting growth in excess of 5% for the year ahead.
Black commented: “It is really encouraging to see firms forecasting strong growth for the year ahead. That said, many firms do see a lot of downside risk to their forecasts and they remain nervous about how the year ahead will pan out.”
Notes to editors
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