Mergers push the top 100 firms back into double digit growth

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A wave of consolidation in the UK legal industry has sparked double digit growth among the top 100 law firms for the first time in five years.

The latest Deloitte quarterly legal sector survey today (13 September) revealed a 10.5% increase in fee income generated in Q1 (ending 31 July) compared to the same period last year.

The growth was boosted by mergers within the sector, which accounted for approximately half of the fee income increase, with the balance due to an increase in general market activity. Continue reading “Mergers push the top 100 firms back into double digit growth”

Comment: The age of turbulence has only just begun for the UK’s top 100 firms

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Respectable, yes, but 2012/13 was a tough year, even by the post-Lehman standards law firm leaders have become accustomed to. While a frantic run of consolidation and international expansion pushed revenue up 8% to £19.1bn, like-for-like growth was far more subdued.

On all objective measures of productivity and profitability, there were further slides, even before accounting for inflation. Back-of-the envelope calculations indicate that the UK’s top 100 law firms are about 25-30% off their boom-time highs in real terms underlying profitability.

Continue reading “Comment: The age of turbulence has only just begun for the UK’s top 100 firms”

Comment: If the mid-tier’s days are numbered why do they keep doing so well?

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We’ve had five years of unforgiving conditions for law firms, everyone agrees. And in many respects that squeeze has had predictable results on the upper echelons and lower half of the LB100. But this year it’s the mid-tier which has had the most interesting 12 months. This group should by rights and conventional wisdom be on its knees, yet judged on 2012/13 results they aren’t. Looking at organic growth, plenty of firms in the 26-50 range out-shone larger rivals and many of the stand-out performances this year – among them Mishcon de Reya, Holman Fenwick Willan, Macfarlanes and RPC – hail from this segment. Continue reading “Comment: If the mid-tier’s days are numbered why do they keep doing so well?”

Merger frenzy hikes Legal Business 100 income but growth masks another tough year

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The latest Legal Business 100 results show the total revenue of the UK’s top 100 law firms has topped £19bn for the first time, while the number of lawyers across those firms has passed the 60,000 mark, also a first. However, this top-line growth is largely the result of another year of fervent merger activity, masking the fact that on a granular level many firms are struggling to achieve revenue and profit growth. Total revenue for the LB100 for 2012/13 is £19.1bn, an increase of 8%, while total lawyer headcount swelled 10% to 61,299. Continue reading “Merger frenzy hikes Legal Business 100 income but growth masks another tough year”

Merger frenzy hikes LB100 income but growth masks another tough year

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Lawyer count passes 60,000 but profits fall at top UK firms

The latest Legal Business 100 results show the total revenue of the UK’s top 100 law firms has topped £19bn for the first time, while the number of lawyers across those firms has passed the 60,000 mark, also a first. However, this top-line growth is largely the result of another year of fervent merger activity, masking the fact that on a granular level many firms are struggling to achieve revenue and profit growth.

Total revenue for the LB100 for 2012/13 is £19.1bn, an increase of 8%, while total lawyer headcount swelled 10% to 61,299. However, average revenue per lawyer (RPL) is down 2% to £312,000, while profit per lawyer (PPL) and profits per equity partner (PEP) are down 2% and 4% to £95,000 and £622,000 respectively.

The primary cause for this year’s drop in RPL and PPL is the swathe of mergers over the past year, particularly among firms in the top 25.

Continue reading “Merger frenzy hikes LB100 income but growth masks another tough year”

Reports season 2013 – DWF’s acquisition trail sees bumper revenue and profit increase

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It has swiftly moved from obscure regional player into one of the most closely watched practices on the national scene and financial results announced today (6 June) confirm the extent of its dramatic ascent. DWF, which has completed five mergers in under 18 months, has unsurprisingly reported significant revenue and profit increases for the 2012/13 financial year.Turnover at the law firm is up 84% to £188m, while the firm’s net profit is up 41%, with profit per equity partner standing at £429,000, against £408,000 the previous year.

Continue reading “Reports season 2013 – DWF’s acquisition trail sees bumper revenue and profit increase”

Panic has ramped up merger mania

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A clear message from last month’s LB100 report was that the merger of two firms that have ‘simply cuddled together for bodily warmth to escape the chill of the recession’ could be a defective strategy. However, it seems that the appetite for mergers between struggling firms in the mid-market shows no signs of slowing down. Continue reading “Panic has ramped up merger mania”

Two decades of consistency

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When we first published the gross fees of 35 leading firms with revenues over £20m in 1992, we were approaching the peak of the information age: the exponential rise of e-mail, the web and the mobile phone. Suddenly the way we went about our daily lives changed forever and we have rarely looked back. But as technology changed everything over the past two decades, the legal profession has remained a constant.

Continue reading “Two decades of consistency”

LB100 2012 – Behind the Numbers: Profitability Revealed

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Which firms are the most profitable? In this table we blend together all of our profitability measures, including PEP, profit per lawyer and profit margin, to discover which of the top 100 firms are the most profitable.

The 100 firms have been ranked according to their mean rank on all three measurements.

Continue reading “LB100 2012 – Behind the Numbers: Profitability Revealed”