4% fee income increase for top 100 law firms but market still vulnerable
International advisory group Deloitte has reported a 4% increase in the fee income of the UK’s top 100 law firms in the quarter ending 31 July 2011 over the same period last year. However, whilst it might indicate signs of recovery, the figures mask the fact that there was a huge variation in the performance of firms in general and that the legal market remains vulnerable.
The report suggests that one sixth of law firms grew their revenue by more than 12% in the period, but also that revenue declined by 4% or more for a similar percentage. Larger firms, particularly those with an international presence seem to have fared the best, profiting also from Sterling’s weakness.
It is suggested that the higher revenues were generated through a combination of productivity increases of 2.5% and headcount increases of 3.1%.
Jeremy Black, partner in Deloitte’s Professional Services group, said:“The increase in fee income will be welcome but should not mask the fact that conditions generally are challenging….. There is a general feeling of nervousness about the prospects for the months ahead with domestic demand expected to remain weak and continued pressure on rates.”