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 2017/18 – usually 1 May 2017 to 30 April 2018. We call these the 2018 results. Where firms have identical fee incomes, the firms are ranked according to highest profit per equity partner (PEP).
Sources
An overwhelming majority of firms that appear in the LB100 co-operate fully with its compilation (see ‘Transparency’, below) 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.
Law firm structures
We recognise that, as firms have expanded globally, they have developed a number of ways of structuring their businesses, for instance using Swiss Vereins, European Economic Interest Groups, and partial and full profit-sharing models. For consistency’s sake, we now publish the global firm-wide financials for all of the firms in the LB100, regardless of how they internally structure themselves or share profits. So the turnover, profitability, PEP and headcount figures published for Ashurst, CMS, Eversheds Sutherland, Herbert Smith Freehills, Norton Rose Fulbright, Hogan Lovells, Fieldfisher, Osborne Clarke, Taylor Wessing and DLA Piper are all global, firm-wide figures, except where noted.
Definitions
Turnover/revenue/gross fees
Revenue figures do not include VAT, disbursements, interest or anything other than the worldwide fees generated by lawyers for their work during the last financial year.
Net income
We define net income as the total profits that are available to be shared among equity partners. We treat profit sharing with non-equity partners or fixed-share equity partners as an expense and it is therefore not included in the net income figure.
Total lawyers
Total lawyer numbers include partners, trainees, assistants, associates, of counsel and all other fully qualified lawyers, but do not include legal executives, paralegals or other support staff. We ask firms for actual full-time equivalent headcount at the end of the last financial year. Lawyer and partner numbers are rounded up to the nearest whole number.
Equity partners
We define full-equity partners as partners that are full participants in the firm’s profits. Fixed-share equity partners are considered non-equity partners for the purposes of this survey.
Non-equity partners
Non-equity partners, be they fixed-share, salaried, or laterals on probationary periods, are those that are not full participants in the firm’s profits, though they may have voting rights.
How we crunch the numbers
Profit per equity partner
We calculate PEP by dividing net income by the whole number of full equity partners at the end of the last financial year. PEP is an average figure used to benchmark the profitability of firms, which is not necessarily the same as saying that any partners take home this amount of money.
Revenue per lawyer (RPL)/profit per lawyer (PPL)
RPL is calculated by dividing turnover by the total number of lawyers at the end of the last financial year. PPL is calculated by dividing net income by the total number of lawyers.
Profit margin
Profit margin is net income as a percentage of turnover.
Change 2013-18
This figure is the simple percentage change in revenue between the 2012/13 financial year (as reported in the 2013 LB100) and the 2017/18 financial year.
Footnotes
- DLA Piper and Sacker & Partners operate a year-end to 31 December 2017.
- On 1 May 2017, CMS Cameron McKenna, Nabarro and Olswang merged to form a UK LLP named CMS Cameron McKenna Nabarro Olswang. For the 2018 LB100, figures for CMS are global financials for the CMS group as a whole.
- Eversheds Sutherland – on 1 February 2017, Eversheds and Sutherland Asbill & Brennan formed a UK company limited by guarantee. Data in the report are global figures for the combined firm.
- Taylor Wessing – as the firm operates separate profit pools in each jurisdiction, headcount and revenue figures are global, while PPL, profit margin and PEP are calculated according to the UK net income and fee-earner numbers only.
- In April 2018, Bryan Cave merged with Berwin Leighton Paisner to form Bryan Cave Leighton Paisner. Figures shown here are for legacy BLP only and were not supplied by the firm.
- In June 2017 Addleshaw Goddard merged with HBJ Gateley in Scotland. As such, year-on-year comparisons across key financial metrics are not applicable.
- Irwin Mitchell does not operate a traditional law firm partnership and partners are remunerated according to salaries and bonuses, not profit shares. The PEP figure is illustrative for the purposes of the LB100 and is not supplied by the firm.
- Osborne Clarke – as the firm operates separate profit pools, headcount and revenue figures are global, while PPL,
profit margin and PEP are calculated according to the UK net income and fee-earner numbers only. - Gateley became the UK’s first listed law firm in 2015. Gateley does not operate a traditional law firm partnership and profit is not distributed among equity partners. As such, the figure for PEP published in the table is for published net profit per partner and is not provided by the firm. PEP and equity partner metrics are not included in the calculation of LB100 and group averages in the report.
- Keoghs does not operate a traditional law firm partnership and profit is not distributed among equity partners. As such, the figure for PEP published in the table is for published net profit per partner and is not provided by the firm.
- In 2018, Knights listed on the London Stock Exchange. The firm does not operate a traditional law firm partnership and profit is not distributed among equity partners. As such, the figure for PEP published in the table is for published net profit per partner and is not provided by the firm. PEP and equity partner metrics are not included in the calculation of LB100 and group averages in the report.
- Keystone Law is an alternative business structure regulated by The Law Society. The firm does not operate a traditional law firm partnership and profit is not distributed among equity partners. As such, the figure for PEP published in the table is for published net profit per shareholder and is not provided by the firm. PEP and equity partner metrics are not included in the calculation of LB100 and group averages in the report.
- MW Solicitors does not operate a traditional law firm partnership and profit is not distributed among equity partners. As such, the figure for PEP published in the table is for published EBITDA per shareholder and is not provided by the firm. PEP and equity partner metrics are not included in the calculation of LB100 and group averages in the report.
Transparency
Legal Business takes the compilation of the LB100 very seriously. We make every effort to ensure that the figures we publish are accurate.
The overwhelming majority of firms co-operate fully with us in this regard. Among the 100 firms featured in the survey, seven declined to provide any financial information formally. These were: Bryan Cave Leighton Paisner; Dickson Minto; Digby Brown; Freeths; Mishcon de Reya; Slaughter and May; and Thompsons.
A further ten firms did not disclose profitability and/or equity partner numbers. These were: Browne Jacobson; DMH Stallard; Gateley; Gowling WLG; Ince & Co; Irwin Mitchell; MW Solicitors; Norton Rose Fulbright; Payne Hicks Beach; and Winckworth Sherwood.
A further ten firms were unable to provide us with their top and bottom of equity: Allen & Overy; Ashurst; BLM; Clifford Chance; DLA Piper; Eversheds Sutherland; Penningtons Manches; Simmons & Simmons; Macfarlanes; and Travers Smith.
The following 11 firms did not provide UK fee income: Allen & Overy; Ashurst; Bird & Bird; CMS; DLA Piper; Eversheds Sutherland; Freshfields Bruckhaus Deringer; Linklaters; Norton Rose Fulbright; RPC; and Simmons & Simmons.