Law firms maintain strong growth through third quarter
5 April 2018
- Top 100 UK law firms increase fee income by 7.7% in Q3 of FY18;
- Fees per fee earner up by 4.0%;
- Increase in chargeable hours per fee earner of 1.6%.
The UK’s top 100 law firms achieved fee income growth of 7.7% in the quarter ended 31 January 2018, compared with the same period last year, according to the latest Quarterly Legal Sector Survey by Deloitte.
Higher revenues this quarter have been driven by average increases in fee earner headcount and fees per fee earner, with both increasing by approximately 4%.
Jeremy Black, partner in Deloitte’s professional services practice, said: “This has been another robust quarter for firms in the legal sector, in particular the small to mid-size firms. While all firms are facing a number of challenges, overall performance remains strong.”
Despite industry growth in fee income, there was a significant difference between law firms. Firms in the 1-10 size category, reported much lower growth of 2.5%, as a result of stable fee earner numbers and continued pressure on rates.
All but the largest 10 law firms grew fee earner headcount, with size categories 11-25 and 26-50 growing by 6% and firms in the 51-100 category by 3%.
The increase in fee income for firms in the 11-25 (9.6%) and also the 51-100 size categories (8.4%) outstripped their growth in fee earner headcount and chargeable hours per fee earner. This indicates that firms in these size categories have successfully grown their fees generated per hour.
The survey also found that participants expect a slow fourth quarter, with fee income forecast to increase by 4%.
Black added: “Although firms remain cautious about the future the underlying data shows that the market remains resilient.”
Notes to editors
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The information contained in this press release is correct at the time of going to press.
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