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), ranked by gross fee income generated over the financial year 2021/22 – usually 1 May 2021 to 30 April 2022. We call these the 2022 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’, opposite) 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 and estimates taken from previous years’ LLP accounts.
LAW FIRM STRUCTURES
We recognise that, as firms have expanded globally, they have developed several ways of structuring their businesses, for instance using Swiss Vereins, European Economic Interest Groupings, and partial and full profit-sharing models.
For consistency’s sake, we now publish the global, firm-wide financials for all the firms in the LB100, regardless of how they internally structure themselves or share profits. So, the turnover, profitability, PEP and headcount figures published are all global, firm-wide figures, except where noted.
Several firms (see footnotes) do not operate LLP partnerships and do not have equity partners. For the purposes of the main table, no profit figures are provided for these firms and readers should refer to stock exchange reports for a clearer picture of profitability and dividend payments. Therefore, the profits and partner numbers of these firms are excluded when calculating LB100 or peer group averages for PEP and profit per lawyer.
DEFINITIONS
Turnover/revenue/gross fees
Revenue figures do not include VAT, disbursements, interest or anything other than the worldwide fees generated by firms 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 full 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 their 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 (where applicable) 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 2017-22
This figure is the simple percentage change in revenue between the 2016/17 financial year (as reported in the 2017 LB100) and the 2021/22 financial year.
FOOTNOTES
- DLA Piper and Sacker & Partners operate a year-end to 31 December 2021.
- Eversheds Sutherland – while turnover figures are global, PEP calculations are based on Eversheds Sutherland International LLP only.
- Clyde & Co – in July 2022, the agreed merger between Clyde & Co and BLM went live. The numbers in this report are for Clyde & Co pre-merger only and 2021/22 data for BLM was unavailable at press time.
- DWF is admitted to the main board of the London Stock Exchange and no longer operates as a conventional partnership. As such, profit is not distributed among equity partners and profit figures are not published in the main table.
- 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 UK net income and fee-earner numbers only.
- 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.
- 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, profit figures are not published in the main table.
- Knights is 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, profit figures are not published in the main table.
- Keoghs does not operate a traditional law firm partnership and profit is not distributed among equity partners. As such, profit figures are not published in the main table.
- Slater and Gordon became the world’s first listed law firm in 2007. It does not operate a traditional law firm partnership and profit is not distributed among equity partners. As such, profit figures are not published in the main table. Turnover relates to the UK business only.
- Ampa – In June 2021 the Ampa legal and professional services group was launched, which includes law firms Shakespeare Martineau, Lime Solicitors, Mayo Wynne Baxter and GL Law, as well as planning consultancy Marrons Planning, loss recovery experts Corclaim and cyber security consultancy CSS Assure. Figures are for the group as a whole, and as such year-on-year comparisons with Shakespeare Martineau are not applicable.
- Keystone Law is 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, profit figures are not published in the main table.
- gunnercooke – does not operate a traditional law firm partnership and profit is not distributed among equity partners. As such, PEP figures are not published in the main table.
- RBG – RBG Legal Services Ltd is the legal services division of AIM-listed professional services group RBG Holdings plc. It trades as two brands: 1) transactional, advisory, and regulatory firm Memery Crystal and 2) disputes specialist Rosenblatt. Its most recent financial year is 1 January-31 December 2021.
- RWK Goodman – the merger of Bath-based Royds Withy King and London firm Goodman Derrick, now known as RWK Goodman, took effect on 1 May 2022. Figures in the table are for legacy Royds Withy King only.
- Fletchers does not operate a traditional law firm partnership and profit is not distributed among equity partners. As such, profit figures are not published in the main table.
Transparency
We take the compilation of the LB100 very seriously. The overwhelming majority of firms featured co-operate fully with us to provide the relevant information on headcount, revenue and profit to ensure the figures we publish are accurate. Among the 100 firms featured in the survey, four declined to provide any financial information formally. These were: Slaughter and May, Slater and Gordon, Harrison Clark Rickerbys and Thompsons.
A further five firms, in addition to those in the footnotes above, did not disclose details of profit. These were: Norton Rose Fulbright, Gowling WLG, Ince, Browne Jacobson and Devonshires.