‘I don’t think you will get any of the City firms to talk about this sort of thing… You have? Well. I am astonished. It is one thing for the Americans and accountants to get into this sort of thing, but not the lawyers.’
‘Anyone who gives you that information will be booted out of the partnership.’
‘When clients see these types of figures, they will inevitably think we are being too highly paid and in many ways they are right. I can see a time when lawyers will not be able to justify making this amount of money. We have to steer a course between our competitors laughing at us for not grossing enough, and clients being angered by the amount of money we are making.’
These three quotes, taken from our very first financial survey in 1992, speak volumes. The fact that no-one would go on the record, even for more generalist comment around law firm revenues, spoke of an industry above such grubby considerations as money. In spite of this reticence, the fact that LB managed to extract the turnover and profit figures of 35 UK firms with revenue over £20m by anonymous co-operators at those firms tells its own interesting story, even as that data was divulged despite ominous warnings from management around the partnerships.
But once the floodgates were opened, there was no holding back. The industry went from not knowing what profit per equity partner figures were one year, to in 1993 being presented with the financial data of the top 100 UK firms – the LB100 as we know it today.
The cloak and dagger secrecy of law firm financials has evaporated over time as the concept of the profession evolving into a business took hold.
The contrast between then and now is extraordinary. In 1993 more than 20,000 lawyers in the UK grossed £2.68bn. Now, 76,627 fee-earners have amassed £31.35bn, more than a tenfold increase in turnover for the group. The average firm in 1993 had 200 lawyers billing around £27m compared with 776 lawyers billing £313.5m.
Faced with these comprehensive figures, it’s fair to say that the cloak and dagger secrecy of law firm financials has evaporated over time as the concept of the profession evolving into a business increasingly took hold. That said, there are even now in 2022 firms which prefer to remain tight-lipped on the vulgar subject of lucre, with Slaughter and May (not required to file LLP accounts) being the perennial poster child of those not wishing to discuss financials. A handful of others did not disclose details of profit.
A read through this year’s LB100 report, as with the vast majority that preceded it, reveals nary an anonymous comment, indicative of an industry that has grown confidently into the groove of speaking about such pecuniary matters. It might also be said that this transparency speaks of a professionalised industry that has grown as Legal Business has grown with it, through the boom years and the bust.