A lack of clarity on the state of Brexit negotiations together with tougher macroeconomic conditions don’t seem to have impacted the UK top 100 law firms which posted an average 8.5% increase in fee income for the quarter ending July 2017.
Deloitte’s quarterly legal sector survey showed the growth was largely due to a 7% increase in fees-per-fee earner at the country’s top players. However, despite this top-line growth, the growth in chargeable hours per fee earner at the top ten UK law firms was lower at 3%.
Players in the 11-25 bracket saw the biggest increase in fee growth of 10.5%, despite seeing a 3.5% increase in chargeable hours per fee earner.
Conversely, firms in the 26-50 and 51-100 categories reported the largest increases in chargeable hours per fee earner of 4% and 5% respectively while the increase in fee income for the 26-100 group was 7.8%
Currency impact accounted for some of the disparity, with the top 25 benefiting more from the weak pound due to larger international operations.
‘It was a strong quarter – stronger than some people predicted,’ Deloitte partner Jeremy Black told Legal Business. ‘Activity has increased across most practice areas.’
‘As a result of the Brexit vote there has been uncertainty for some time, but businesses have started to feel that it is not necessarily the right option to wait and see what happens. And on the private equity side, a lot of funds have a lot of money to invest.’
Management at the firms surveyed by Deloitte also revealed wary optimism for the rest of the year, with the top ten predicting an average 4.9% growth for the financial year ending in April 2018. Optimism was strongest among firms in the second half of the table, which expect an average growth of 6.7% on the 2016-17 financial year.