The capital has extended its position as the most buoyant legal market in the UK, with midsize London law firms continuing to outpace their regional rivals, notching up an average 10% increase in organic revenue this year compared to just a 5.5% revenue rise for non-London firms.
The South, North and Scottish regions are among the worst performing markets for LB100 firms this year, with firms in those regions increasing revenue on average by just 1%, 5% and 5% respectively.
However the Global Elite, which comprises the UK Magic Circle firms, saw revenues increase by just 3% on average, the second-worst performance of all the peer groups.
The South is the weakest peer group in the LB100, with combined revenues of £402m and an average profit margin of 18%.
But while market conditions continue to be challenging in the regions, firms with a national presence such as Irwin Mitchell, Pinsent Masons and Addleshaw Goddard had a solid year. On average the Major UK peer group saw revenues rise by 7% across the board, with profit per lawyer also increasing by around 1%.
Major UK firm Eversheds increased its turnover by 3% to £366m this year. Chief executive Bryan Hughes believes this performance is due to the firm being well hedged thanks to its national practice.
‘We’re not one of these firms that has big peaks and big troughs – we’re more “steady Eddies”,’ said Hughes. ‘It’s not just the regional offices that give us a market hedge. If you are single-site dependent on transactional activity, you’ll be reviewing your next move pretty carefully,’ added Hughes.
But London-based firms had the best year, on average increasing revenues by 10%. Top performing London firms include Mishcon de Reya, which increased revenues by 12% to £73.1m and Travers Smith, which increased turnover by 16% to £83.8m.
‘We have seen a reasonable flight in investment out of certain eurozone countries into the UK. London is being seen as the safe house of Europe,’ said Kevin Gold, managing partner of Mishcon de Reya. ‘We are principally a one-office London firm whereas most of our competitors in and around us are multiple office firms.’
London property and private client firm Forsters, which comes in at number 87 in the LB100, also saw revenues rise by 12% to £28m this year. Managing partner Paul Roberts said that this performance was down to a strong local market. ‘London is increasing its dominance in the world,’ said Roberts. ‘The common factor [for our clients] is that London is either where they have their second home or where they see the financial centre of their activities being based, even though they may not be English and they may have generated their wealth in a very different part of the world.’