LB100 LAW FIRMS
The firms that appear in the LB100 are the top 100 firms in the UK, ranked by gross fee income generated over the financial year 2012/13 – usually 1 May 2012 to 30 April 2013. We call these the 2013 results. Where firms have identical fee incomes, the firms are ranked according to the highest profits per equity partner (PEP).
SOURCES
An overwhelming majority of firms that appear in the LB100 co-operate fully with its compilation (see ‘Transparency’, right) by providing our reporters with the required information. A limited number of firms choose not to co-operate officially with our data collection process, and in these circumstances we rely on figures given to us by trusted but anonymous sources.
LAW FIRM STRUCTURES
We recognise that as firms have expanded globally they have developed a number of ways of structuring their businesses, for instance using Swiss Vereins, European Economic Interest Groups, partial and full profit sharing models. For consistency’s sake we now publish the global firm-wide financials for all of the firms in the LB100, regardless of how they internally structure themselves or share profits. So the turnover, profitability, PEP and headcount figures published for CMS, Norton Rose Fulbright, Squire Sanders, Dentons, Hogan Lovells, Taylor Wessing and DLA Piper are all global firm-wide figures.
DEFINITIONS
Turnover/revenue/gross fees
Revenue figures do not include VAT, disbursements, interest or anything other than the worldwide fees generated by lawyers for their work during the last financial year.
Net income
We define net income as the total profits that are available to be shared among all the equity partners. We treat profit sharing with non-equity partners as an expense, and it is therefore not included in the net income figure.
Total lawyers
Total lawyer numbers include partners, trainees, assistants, associates, of counsel and all other fully qualified lawyers but do not include legal executives, paralegals or other support staff. The headcounts we publish are always full-time equivalent averages over the firm’s most recent financial year.
Equity partners
We define full equity partners as partners that are full participants in the firm’s profits.
Non-equity partners
Non-equity partners, be they fixed-share, salaried, or laterals on probationary periods, are those that are not full participants in the firm’s profits, though they may have voting rights.
HOW WE CRUNCH THE NUMBERS
Profits per equity partner (PEP)
We calculate PEP by dividing net income by the mean number of full equity partners in the last financial year. PEP is an average figure used to benchmark the profitability of firms, which is not necessarily the same as saying that any partners take home this amount of money.
Revenue per lawyer (RPL)/profit per lawyer (PPL)
RPL is calculated by dividing turnover by the total number of lawyers. PPL is calculated by dividing net income by the total number of lawyers.
Profit margin
Profit margin is net income as a percentage of turnover.
Change 2008-13
This figure is simple percentage change in revenue between the 2007/08 financial year (as reported in the 2008 LB100) and the 2012/13 financial year.
Transparency
Legal Business takes the compilation of the LB100 very seriously. We make every effort to ensure that the figures we publish are accurate.
The overwhelming majority of firms co-operate fully with us in this regard. Among the 100 firms featured in the survey, just five declined to provide any financial information formally. These were:
• Dickson Minto
• Hugh James
• Keoghs
• Slaughter and May
• Thompsons
A further eight firms did not disclose profitability and/or equity partner numbers, these were:
• Berwin Leighton Paisner
• Browne Jacobson
• Ince & Co
• Norton Rose Fulbright
• Parabis Law
• SGH Martineau
• SJ Berwin
• Slater & Gordon UK
• Winckworth Sherwood
Another 11 firms would not provide us with their top and bottom of equity: Berrymans Lace Mawer; Clifford Chance; Dentons; DLA Piper; Herbert Smith Freehills; Hogan Lovells; Irwin Mitchell; Macfarlanes; Mishcon de Reya; Squire Sanders; Travers Smith.
The following nine firms did not provide UK revenue figures: Allen & Overy; Dentons; Freshfields Bruckhaus Deringer; Irwin Mitchell; Linklaters; Pinsent Masons; RPC; Simmons & Simmons; Squire Sanders
FOOTNOTES
- DLA Piper, Manches and Sacker & Partners operate a year-end to 31 December 2012.
- Norton Rose and Fulbright & Jaworski merged on 1 June 2013 to form Norton Rose Fulbright. The figures published here are for legacy Norton Rose only.
- On 28 March 2013, SNR Denton, Salans and Fraser Milner Casgrain combined to form Dentons. The firm has provided combined financial information, based on adding together the results for the financial year 2012/13 for all three legacy firms.
- Herbert Smith and Freehills merged on 1 October 2012. As the firm chose to provide financial information only for the period October 2012-April 2013, the figures shown here are our extrapolation of those results for the full financial year.
- CMS accounts in euros. For conversion into sterling, we have used a rate of €1 equals £0.8141, the average for the financial year provided by HMRC.
- Bond Pearce and Dickinson Dees merged on 1 May 2013 to form Bond Dickinson. As both legacy firms completed full financial years prior to the merger, they are listed separately in the table this year.
- Slater & Gordon UK has 47 LLP members and, as such, the PEP figure quoted is actually profit per member.