Law firms achieve modest growth
FEES per fee earner at the top 100 UK law firms have increased by 2.4% this quarter, compared with the same period last year, according to the latest quarterly legal sector survey.
This resulted in overall growth of 3.6% in fees per fee earner this financial year, according to business advisory firm Deloitte.
While the underlying rates of growth were relatively modest this quarter, firms ranked between 51-100 boosted fee income by 7.1% in the last 12 months, driven largely by merger activity.
Clare Boardman, restructuring services partner and legal sector specialist at Deloitte, said: “Despite a slowing rate in fee income growth this quarter, firms have on average delivered strong progress over the financial year. This year’s figures highlight the consolidation in the market, particularly amongst the smaller firms.”
The survey also tracked annual fees per fee earner over a six year period and found that the UK’s 10 largest firms generated 18% growth over the last six years. In contrast, firms in the 26-50 category achieved only a 1% increase reflecting a decline in real terms. For firms in the 51-100 category things were even tougher with fees per fee earner still well below the April 2008 figures.
Boardman added: “The different performance levels experienced by firms in the various size categories reflect different market dynamics, with particularly intense competition in the more commoditised end of the market. Despite modest underlying growth in the final quarter, for the larger firms we are seeing confidence continue to increase. As the economy picks up we would expect to see a further widening in the gap in underlying performance between firms in the top 50 by size and the smaller firms.”