Accountancy giant Deloitte has recorded reduced fee income for the top 10 UK law firms in the first quarter of 2014/15, with a 2.7% fall as a result of a 2.1% decrease in fee earner headcount alongside a decline in sterling rates as a consequence of the strong pound.
Deloitte’s quarterly legal sector survey results showed that the top 100 UK law firms overall achieved a fee income increase of 6.1% compared with the same quarter last year, a hike that was largely driven by merger activity in the last twelve months.
The quarter saw differing performance levels across the market, with those firms ranging in the 11-25 category faring better than the top ten, and achieving average growth in fee income of 6.2% which was due to increases in chargeable hours per fee earner of 3.5% alongside some improvements in rates.
Jeremy Black, a partner in Deloitte’s professional practices team, said: ‘The market for firms in the 26-100 size category continues to be tough with growth coming from mergers and lateral hires rather than increases in use or rates. While exchange rate movements have hit the global firms this quarter, we would expect the performance of the top 25 firms to improve as the economy picks up. This will continue to widen the gap in underlying performance between the larger and smaller firms’.
For more insight on top 100 UK firm performance, see the LB100: 2014