LB100: The Second Quartile – The first shall be last…
The City’s mid-tiers defied the critics to achieve market-leading pace through 2015, cementing the gains of recent years. How big an upset can the tortoises deliver?
There are a few simple ideas that define the pecking order in the UK legal industry. The big boys are international, materially larger than the tiers below and two to three times as profitable as their mid-pack cousins.
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UK-driven law firms outperform City leaders in this year’s dynamic-changing LB100
This year’s Legal Business 100 (LB100) has seen the dynamics of the UK legal market turn on its head as national-driven law firms outperformed those at the top of the table, including the Magic Circle.
Overall, total revenue for the LB100 in the financial year 2014/15 is down 1% to £20.64bn, while lawyer headcount has also decreased – down 2% to 64,024. But, these figures mask the positive performance from firms ranked 26-50, with average turnover up 6% to £112m. While revenue per lawyer (RPL) was down 3% to £248,000, profits were up – with profits per equity partner (PEP) seeing a double-digit increase of 10% to £453,000.
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LB100: The Second 50 – More or less
Specialist practices and focused City firms in the second 50 thrived in what remained an uncertain market.
The second 50 is a hard place for any law firm without a strong claim on their chosen patch. Overall this section of the market saw a flat year despite the support of a relatively upbeat domestic economy and surging property market.
LB100: The Second 50 – The Lion & the Unicorn
Regional firms are experiencing mixed fortunes. Can they take advantage of a less London-focused client base?
Regional and national firms dominate the second half of the Legal Business 100 (LB100), but typically they do not enjoy the same success as the London-based firms that also occupy the lower end of the table. This year, 32 firms ranked 51-100 are regional or national law firms based outside London, totalling £1.2bn in revenue from 6,308 fee-earners.
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LB100 2015: Methodology and notes
LB100 LAW FIRMS
The firms that appear in the Legal Business 100 (LB100) are the top 100 firms in the UK, ranked by gross fee income generated over the financial year 2014/15 – usually 1 May 2014 to 30 April 2015. We call these the 2015 results. Where firms have identical fee incomes, the firms are ranked alphabetically.
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. Continue reading “LB100 2015: Methodology and notes”
The Last Word: Through the looking glass
From a successful UK focus to consolidation, LB100 management figures give their reflections on the market
So far so good
‘A number of businesses like us have adopted a strong sector proposition in the UK and that has been welcomed by the market. It reflects a general improvement in the UK economy and those businesses with a strong imprint in the UK market will benefit from that. We have grounds for confidence but the main challenges I see are around the uncertainty that remains at a macro level in a number of economies where we trade. It remains to be seen how clients respond and adapt to the EU referendum in the UK. There is continuing uncertainty in the eurozone, brought about by the position of Greece – I still see that limping along.’
John Cleland, managing partner, Pinsent Masons
Case study: Charles Russell Speechlys
‘We have worked very hard since the outset to demonstrate that we are not simply a private client firm,’ says James Carter, managing partner of Charles Russell Speechlys (CRS). His comments come nine months after the union of Charles Russell and Speechly Bircham, creating a 530-lawyer practice that moves into the UK top 30 with revenues of £134.5m, slightly ahead of the legacy firms’ combined income for 2013/14.
When Carter says private client, he means old-fashioned trusts and estates work. The firm is looking to position itself as a leading private wealth player, covering the full range of commercial legal services for the privately wealthy, including litigation and corporate. Carter wants CRS to leverage its strong reputation in areas including employment, media, sport and fraud practices, alongside private client in all its guises, including a second-tier family practice. Speechly Bircham, alongside its recognised strength in both contentious trusts, personal tax and probate, had a well-regarded mid-market corporate practice. Continue reading “Case study: Charles Russell Speechlys”
Deal machines – the resilience of Macfarlanes, Travers Smith and the mid-tier deal team
The forced obsolescence of Macfarlanes and Travers Smith as City-focused M&A teams has been as long predicted as it has failed to materialise. Since 2010, after both firms quickly recovered from a brutal post-Lehman shock, the pair have proved not just resilient but able to thrive.
The pair performed robustly again in 2014/15, with Macfarlanes having been one of the most successful top-100 firms over the last five years with organic revenue growth of 73%. Around 20% of revenue is generated by its corporate department, reflecting the size of its private client practice and a concerted push to broaden its disputes, regulatory and finance teams. Continue reading “Deal machines – the resilience of Macfarlanes, Travers Smith and the mid-tier deal team”
Case study: Allen & Overy
Amid a challenging year for London’s top firms, Allen & Overy (A&O) managed to hit its stride with revenue growth of 4% to £1.28bn, while profits per equity partner (PEP) came in at £1.21m, a rise of 8%.
The result was significantly ahead of A&O’s London peers, which have also seen their sterling results impacted by weakness in the euro and the inroads of US law firms in City deal work (in constant currency, A&O estimates its revenue growth at 8%). Continue reading “Case study: Allen & Overy”