Top law firms will grow less quickly
THE country’s largest law firms saw fee income rise 6.3% in the three months ended April 30, but weaker growth is forecast for the current year, according to business advisory firm Deloitte.
The firm said overall fee income for the top 100 law firms was up 6.6% on the 2010-11 period, in what it described as a “relatively strong annual performance”by the legal sector.
It believes growth in the current financial yeat to the end of April 2013 will continued to grow, but this will be at a slightly slower rate of 5.7%
Deloitte said with growt of 9.7% the 26-50 tier had seen the highest rate of growth, boosted by merger activity and the recruitment of lateral hires.
Firms with an international presence saw some of their offices outside of the UK, particularly in emerging markets such as Asia, perform well. Firms focusing on specific practice areas, such as litigation, were alos seen as strong performers.
Heather Crosby, partner and head of professional practices in the North at Deloitte, said: “The figures for the year show a positive level of fee generation, especially when considering the current financial climate.
“Nevertheless, firms have continued to face challenges as a result of intense competition, pressure on rates, and a transfer of risk through the increased demand for fixed fees. The ability of law firms to control costs against a backdrop of high inflation will be key to maximising the profitability delivered by this revenue performance.”
Looking to prospects for the current financial year she added: “Firms are predicting a modest rate of growth for the coming financial year. It is not surprising that the legal sector remains cautious given the broadly stagnant domestic marketplace and questions over the future of the euro zone.”
