Profits Up But Revenues Down at UK Top 50 Law Firms

Thu, 15 Jul 2010

The UK’s top 50 law firms have recorded an increase in profit despite a significant drop in revenue. The figures were published in Legal Week – the online legal magazine – and revealed that revenues fell by £461 million to £11.9 billion during the 2009/10 financial year. The dip confirms the difficult economic environment facing even the very best law firms, after the same firms enjoyed annual growth in excess of 10 per cent between 2006 and 2008.

Despite the drop in earnings, however, the top 50 firms were still able to record an average increase of 8.8 per cent in profits per equity partner (PEP) which now stand at £524,500. Analysts are interpreting the results as a sign of the resilience of the UK legal industry. There was significant difference between the performance of the solicitors firms, with profits up by more than 50 per cent at LG, Shoosmiths and Travers Smith.

The performance of the magic circle firms was below-trend among the top 50 performers, with the group’s average turnover down by 7.2 per cent to £4.97 billion. Once again, however, profits still rose, with PEP up by 4.1 per cent on average.
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