Posted on

LB100 2019: Methodology and notes

LB100 law firms

The firms that appear in the Legal Business 100 (LB100) are the top 100 law firms in the UK (usually LLP partnerships but also some alternative business structures – see footnotes), ranked by gross fee income generated over the financial year 2018/19 – usually 1 May 2018 to 30 April 2019. We call these the 2019 results. Where firms have identical fee incomes, the firms are ranked according to highest profit per equity partner (PEP). Continue reading “LB100 2019: Methodology and notes”

Posted on

LB100: Partner earnings

Top 50 firms ranked by highest top of equity

1-50* Equity partners:
non-equity partners		 % of partners that are equity partners PEP Equity spread
1 Fieldfisher 83:292 22% £800k £250k to £4,300k
2 Slaughter and May 102:7 94% £2,895k £1,780k to £3,650k
3 Hogan Lovells 529:262 67% £1,039k £320k to £3,200k
4 Clifford Chance 394:168 70% £1,617k £740k to £2,800k
5 Freshfields Bruckhaus Deringer 374:0 100% £1,839k £430k to £2,710k
6 Ashurst 238:155 61% £972k £500k to £2,500k
7 Eversheds Sutherland 230:558 29% £886k £415k to £2,425k
8 Allen & Overy 388:148 72% £1,660k £960k to £2,410k
9 DLA Piper 484:778 38% £1,069k £350k to £2,350k
10 Norton Rose Fulbright 681:484 58% £687k £457k to £2,300k
11 Macfarlanes 56:28 67% £1,723k £900k to £2,250k
12 Linklaters 443:21 95% £1,697k £630k to £2,250k
13 Clyde & Co 219:200 52% £690k £300k to £1,725k
14 RPC 74:0 100% £441k £192k to £1,700k
15 CMS 602:440 58% £574k £160k to £1,522k
16 Mishcon de Reya 53:69 43% £1,000k £462k to £1,500k
17 Simmons & Simmons 168:115 59% £710k £400k to £1,500k
18 Bryan Cave Leighton Paisner 281:301 48% £640k £294k to £1,470k
19 Travers Smith 48:31 61% £1,235k £615k to £1,450k
20 Herbert Smith Freehills 323:129 71% £949k £540k to £1,450k
21 Taylor Wessing 255:83 75% £655k £250k to £1,395k
22 Addleshaw Goddard 111:132 46% £730k £296k to £1,285k
23 Stephenson Harwood 92:79 54% £727k £403k to £1,208k
24 Watson Farley & Williams 85:69 55% £559k £250k to £1,200k
25 Kennedys 82:207 28% £439k £210k to £1,200k
26 Pinsent Masons 183:264 41% £611k £331k to £1,076k
27 HFW 90:85 51% £481k £230k to £1,052k
28 Brodies 38:57 40% £708k £370k to £1,000k
29 Gowling WLG 371:180 67% £510k £141k to £984k
30 DAC Beachcroft 91:167 35% £570k £460k to £963k
31 Osborne Clarke 181:85 68% £703k £445k to £946k
32 Bird & Bird 119:190 39% £575k £386k to £929k
33 Freeths 41:105 28% £461k £200k to £750k
34 Charles Russell Speechlys 74:94 44% £400k £240k to £630k
35 Browne Jacobson 20:131 13% £475k £200k to £600k
36 Withers 89:91 49% £354k £173k to £552k
37 Mills & Reeve 82:40 67% £416k £340k to £544k
38 Burges Salmon 65:18 78% £442k £239k to £532k
39 TLT 38:87 30% £350k £220k to £510k
40 Trowers & Hamlins 67:75 47% £354k £188k to £500k
41 Shoosmiths 40:138 22% £453k £170k to £476k
42 Penningtons Manches Cooper 35:79 31% £360k £260k to £460k
43 Hill Dickinson 51:65 44% £371k £212k to £460k
44 Womble Bond Dickinson** 65:55 54% £292k £179k to £398k
45 Weightmans 35:154 19% £289k £183k to £312k
46 BLM 61:142 30% £223k £155k to £304k

* Does not include DWF, Irwin Mitchell, Gateley and Keoghs. See methodology
** Womble Bond Dickinson equity spread based on UK partners only

Go to The Legal Business 100 2019 main menu

Posted on

LB100 Second 50 – City and Boutique: The adventurers and the settlers

Cuban-style City

While the UK lurches through a Brexit drama entirely of its own making, mid-market and boutique London-based firms have focused on diversifying their services or using their unique offerings to differentiate themselves from the pack.

The combined turnover for the 18 City firms that sit in the second 50 of this year’s Legal Business 100 (LB100) is £839.7m, an increase of 8%. Average revenue increased 15%, reaching £46.7m. But, inevitably, the top-line growth of the firms in this group is distorted by some sizeable merger activity. Two of those firms have seen large jumps in revenue and headcount: Gordon Dadds, which after acquiring a large chunk of Ince & Co in 2018 and following its initial public offering (IPO) in 2017 – has seen turnover jump 68% from £31.2m to £52.6m under its new Ince branding (see case study). Bircham Dyson Bell, which merged with Reading stalwart Pitmans in December 2018, saw turnover climb from £33.7m to £52m as a result – a spike of 54%. With that level of artificial top-line growth, profit levels are hard to sustain. A 4% growth in the number of equity partners across the group has contributed to average profit per equity partner (PEP) only moving up 3% from £416,000 to £427,000. Continue reading “LB100 Second 50 – City and Boutique: The adventurers and the settlers”

Posted on

Case study: Ince

Nick Goldstone

What a difference a year makes. After an initial public offering, a series of acquisitions – including City institution Ince & Co in October 2018 – and a share price drop earlier this year, Ince Group plc, which previously operated as Gordon Dadds, moves up 23 places in the Legal Business 100 2018/19 following a 69% boost in revenue from £31.2m to £52.6m.

The listed firm added £21.4m to its top line through five acquisitions in 2017 and 2018. The group reported a 73% profit increase from £8.8m to £15.2m, while earnings per share surged by 79% and dividend per share increased by 50%. However, the group reported a £14.3m non-recurring acquisition cost and a debt reduction of £5.5m, bringing the actual figure down to £2.9m. Continue reading “Case study: Ince”

Posted on

LB100 Overview: Apocalypse soon?

red sky

As Legal Business was unpacking the 2018/19 financial results of the UK’s top 100 law firms, the Office for National Statistics reported that Britain’s economy had shrunk for the first time since 2012. The 0.2% fall in output in the second quarter of 2019 was the latest in a series of ominous signs for a nation that appears, at the time of writing, on course for a cliff-edge exit from the European Union amid a chaotic political landscape and falling currency.

As Legal Business went to press, a row was raging over government moves to prorogue Parliament in the run-up to the 31 October deadline to exit the EU, threatening constitutional wrangles and a no-deal Brexit. A nation famed for exporting democracy, its strong institutions and a stable business environment is looking more Banana Republic than Britannia resurgent by the day. Continue reading “LB100 Overview: Apocalypse soon?”

Posted on

Case study: Clyde & Co

Peter Hasson

A model of consistency in the Legal Business 100, 2018/19 was Clyde & Co’s 21st consecutive year of growth – albeit with a merger or two thrown in. This time around it grew 11%, adding £59.7m to its top line to reach £611m.

In just three years, the firm has grown by 36%, or £160m in total. ‘If you went back eight years, we were around £250m turnover. We are now a £600m+ business,’ says senior partner Simon Konsta. Continue reading “Case study: Clyde & Co”

Posted on

Case study: Addleshaw Goddard

John Joyce

Back in 2014, not many – if any – would have predicted Addleshaw Goddard would boast one of the highest percentage growth rates in profit per equity partner (PEP) across the Legal Business 100 over the next five years. But with PEP increasing 13% to £730,000 in the 2018/19 financial year, PEP has risen an impressive 87% over that time.

Top-line growth between 2014 and 2019 is similarly impressive, up 61% to £275.4m, topped by a 14% increase year-on-year. In the five years leading up to 2013/14, turnover for Addleshaws had dipped 1% as the global financial crisis weighed heavily. PEP also fell 11% in 2013/14 due to exceptional expenses including partner restructuring and a written off conditional fee agreement – hence the low starting base for the dramatic growth in partner profits over the last five years. Continue reading “Case study: Addleshaw Goddard”

Posted on

LB100 Second 50 – Regional focus: Crawling on a razor

Cuban-style Birmingham

Smaller regional and national firms have gained ground on their London rivals in this year’s Legal Business 100 (LB100) after years of the productivity gap widening in favour of the City. And, as some of the strongest performers from the 32 regional firms in the 51-100 bracket have shown, a big part of the shift has come from a growing trend of partnering up with law’s global elite to effectively provide northshoring outposts for blue-chip clients.

Following a muted period and just 1% growth last year, the group’s collective revenue rose a solid 7% to £1.36bn in 2018/19, for an average revenue of £42.4m. The productivity per capita at regional firms, traditionally weaker than London counterparts, also grew where City firms lagged this year, closing a gap that had been steadily widening. Revenue per lawyer climbed 9% to £197,000, compared to an almost flat £267,000 in London. Profit per lawyer stayed flat at £38,000, against £78,000 in the City, which was down 6%. Profit per equity partner (PEP), however, slid 5% to £339,000. Continue reading “LB100 Second 50 – Regional focus: Crawling on a razor”

Posted on

Case study: Foot Anstey

John Westwell

With just over 200 lawyers and only 48 partners, Foot Anstey has been among the ten fastest-growing firms in the Legal Business 100 over the last five years. Stretch that track back to six years, and the firm has nearly doubled its turnover to £47.2m. Profit per equity partner has also grown 52% since 2014, up a healthy 8% to £400,000 in 2018/19.

That growth, including a 9% revenue uptick this year, has come from a smaller base than many but is also organic. The firm’s corporate practice grew by about 30%, property litigation was up 23%, and the finance team boomed on the back of 75% growth in Islamic banking and private equity work lifting 85%. New client wins included motorway service operator Welcome Break, private equity firm Livingbridge, and a reappointment to FTSE 100 retailer Kingfisher’s legal panel. It also advised on the £1.6bn Pivot Power electric vehicle recharging network – the world’s biggest. Continue reading “Case study: Foot Anstey”

Posted on

New players and funding prompt evolution of disputes but City leaders adapt well

Damien Byrne Hill

‘We’ve disrupted the market – everybody knows about us now,’ says Quinn Emanuel Urquhart & Sullivan London co-managing partner Ted Greeno of the US firm’s inexorable rise in the City.

The ex-Herbert Smith Freehills (HSF) partner, himself one of a string of high-profile recruits Quinn Emanuel made since its London launch in 2008, has a point. The disputes-only powerhouse now counts some 85 full-time partners and associates in London – a larger team than Slaughter and May’s litigation offering and not far off the size of Clifford Chance (CC)’s muscular City practice (see below). Continue reading “New players and funding prompt evolution of disputes but City leaders adapt well”

Posted on

A no-deal outlook and the law – time for pragmatic pessimism

Alex Novarese

We go to press with Parliament locked in battle with the Government over threats to take the UK into a ‘no-deal’ exit from the European Union (EU). I’m not going to offer political predictions but we are clearly at the point where a disorderly exit from the EU is a very real prospect for the country and the profession.

The good news is that the largest UK law firms feel confident they can largely mitigate the immediate impact of no-deal, even with the abrupt end of EU rights to practise that have been such a boon. This is because potentially obstructive Bars in key markets in France and Germany have been kept onside and UK lawyers feel that other decent workaround options are available (see pages 12-13). With leading UK firms also having substantial foreign operations, including the Legal Business 100 having 19% of their lawyers in mainland Europe, and rapidly increasing their ranks of Irish-registered solicitors, the large outfits at least are braced. The Law Society recently issued research arguing a no-deal would knock 10% off the value of the UK legal market, equivalent to more than £3bn, and costing 10,000 jobs. Most law firm leaders see such predictions as excessive – a scepticism I share – though the industry does believe such an exit would be damaging. Continue reading “A no-deal outlook and the law – time for pragmatic pessimism”

Posted on

LB100: Legal elite shows resilience amid ominous haze

City with red sky and planes

It is a measure of how fast-moving the Brexit-dominated landscape now is that imagery in this year’s Legal Business 100 (LB100) is dominated by Conrad, Castro and Coppola as the summer months have moved to rapidly challenge notions of how Britain works. One of the most stable and predictable major economies in the world has been locked into a mounting political conflict more akin to a banana republic than the Mother of Parliaments. Sooner or later Westminster drama on this scale will spill into a real economy that already contracted in the second quarter.

And yet, the UK’s largest law firms have endured another 12 months of uncertainty and ominous haze with impressive resilience, pushing revenues up 9% to £26.35bn, one of the better years of all-round performance since the banking crisis. And though a handful of mergers flatter that headline figure, 28 firms managed double-digit revenue growth, showing that plenty of UK firms are thriving in these challenging conditions. Continue reading “LB100: Legal elite shows resilience amid ominous haze”

Posted on

The end of A&O’s marathon O’Melveny merger bid reveals the stark choices facing the Magic Circle

starry sky over the City

This article sits in the news leader slot of our latest issue, but when considering Allen & Overy (A&O) and its epic courtship of O’Melveny & Myers, the defining factor has been the absence of news. Since it emerged last spring that A&O was in merger talks with the Los Angeles-bred firm, there have been bare scraps of information, alongside alternating whispers the deal was/was not on. Finally the resolution came on 2 September, with the pair announcing the end of the talks with the traditional noises about mutual respect.

The reason for the long delay was as much the scale and ambition of the merger as the inevitable complications of bringing 700 partners on side. The looming spectre of a messy ‘no-deal’ Brexit and fresh falls in sterling further strained a delicate situation, probably tipping it over the edge. Not only were the firms aiming for full financial integration upfront – a move never attempted on the scale of a £2.4bn transatlantic union – the aim was to do an immediate merging of governance, leadership and remuneration. Forget vereins and grace periods kicking tricky issues down the road. That all-in approach raised the stakes and logistic issues enormously. Not least it would have involved substantive reform of A&O’s remuneration structure to make it more compatible with a US firm. Continue reading “The end of A&O’s marathon O’Melveny merger bid reveals the stark choices facing the Magic Circle”

Posted on

LB100 drives income up 9% to £26.35bn but fears mount of a chaotic no-deal as Brexit fallout spreads

Boris Johnson grafitti wall

With daily headlines reminding the City of the Brexit-induced crisis engulfing the UK, the Legal Business 100 (LB100) has shrugged off the pervasive uncertainty to post another year of robust growth.

Amid the increasing probability of the UK facing a wrenching ‘no-deal’ exit from the EU on the looming 31 October deadline, the LB100 results show the UK’s leading law firms driving collective revenues up 9% to £26.35bn. Continue reading “LB100 drives income up 9% to £26.35bn but fears mount of a chaotic no-deal as Brexit fallout spreads”

Posted on

Mud sticks to Burford amid intense row but dispute funders’ rise looks assured

City of London

‘Throw enough mud at a wall, and some of it will stick,’ the proverb says. But since US investor Muddy Waters published a scathing attack on third-party litigation funder Burford Capital on 7 August, the muck-slinging has not stopped.

The charges in the 25-page report were devastating. Having labelled Burford a ‘poor business masquerading as a good one’, and suggesting the company was ‘already insolvent’, more than £1bn was wiped off the listed funder’s value. Five days later, Burford enlisted Freshfields Bruckhaus Deringer, Quinn Emanuel Urquhart & Sullivan and Morrison & Foerster to pursue claims of illegal market manipulation. Continue reading “Mud sticks to Burford amid intense row but dispute funders’ rise looks assured”

Posted on

Dealing with no deal – Can top law firms cope with a chaotic Brexit?

protesters

Simon Davis has had quite a start to his one-year term as the 175th president of the Law Society of England and Wales. Taking office just a few weeks before Boris Johnson was appointed Prime Minister in July, the Clifford Chance (CC) litigation partner faced the reality of a nation that was heading for a cliff-edge exit from the EU, with major potential disruption for its legal industry.

With the new Conservative government promising to deliver Brexit on 31 October – ‘do or die’ – and the path to a withdrawal agreement with the bloc getting narrower by the day, the prospect of a disorderly exit has rapidly become a realistic possibility. Continue reading “Dealing with no deal – Can top law firms cope with a chaotic Brexit?”

Posted on

LB100: Behind the numbers – profitability revealed

In this table we blend together the three key profitability metrics – profit per equity partner, profit per lawyer and profit margin – to discover which of the top 100 firms are the most profitable. The firms have been ranked according to their aggregate score across all three measurements. Firms marked * are either listed firms or alternative business structures and do not have equity partnerships, meaning their profit distribution does not bear any resemblance to traditional law firm models and why most feature towards the bottom of this table. See methodology for further explanation. Continue reading “LB100: Behind the numbers – profitability revealed”