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).

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 Groupings, 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.

Ten firms (see footnotes) do not operate LLP partnerships and do not have equity partners. For the purposes of the main table, figures indicated for PEP are typically profit divided between principal shareholders or members and are not a true reflection of PEP. Therefore, the profits and partner numbers of these firms are excluded when calculating LB100 or peer group averages for PEP.

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 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 (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 2014-19

This figure is the simple percentage change in revenue between the 2013/14 financial year (as reported in the 2014 LB100) and the 2018/19 financial year.

Footnotes

1. DLA Piper and Sacker & Partners operate a year-end to 31 December 2018.
2. Bryan Cave Leighton Paisner – in April 2018 Bryan Cave merged with Berwin Leighton Paisner. The combined firm is represented here and as such year-on-year comparisons are not included in the main table.
3. Womble Bond Dickinson – on 1 November 2017, UK-based Bond Dickinson and US-based Womble Carlyle Sandridge & Rice combined to create Womble Bond Dickinson. The combined firm is represented here and year-on-year financial comparisons are not included in the table.
4. DWF – in March 2019, DWF was 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 the figure for PEP published in the table is for profit per partner and is not provided by the firm.
5. 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.
6. 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.
7. 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 profit per partner and is not provided by the firm.
8. 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 profit per partner and is not provided by the firm.
9. Penningtons Manches Coopers – Penningtons Manches and Thomas Cooper formally merged in July 2019. Figures shown here are for Penningtons Manches only.
10. 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 profit per partner and is not provided by the firm.
11. Ince – in October 2018, listed company Gordon Dadds Group acquired a substantial part of former City law firm Ince & Co and rebranded as Ince Group. The figures here for the combined group and year-on-year financial comparisons are not included. As Ince is a listed law firm and does not operate a conventional equity partnership, the figure for PEP published in the table is for published net profit per partner and is not provided by the firm.
12. BDB Pitmans – in December 2018, London law firm Bircham Dyson Bell merged with Pitmans in Reading. The combined firm is represented here and year-on-year financial comparisons are not included in the table.
13. 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 profit per shareholder and is not provided by the firm.
14. Cripps Pemberton Greenish – in December 2018, Kent-based Cripps merged with London’s Pemberton Greenish. The combined firm is represented here and year-on-year financial comparisons are not included in the table.
15. Minster Law 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 profit per statutory director and is not provided by the firm.
16. 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 EBITDA per shareholder and is not provided by the firm.
17. Fletchers 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 profit per SRA-approved manager and is not provided by the firm.

Go to The Legal Business 100 2019 main menu