Member Article

Law firms witness lacklustre growth

Law firms continue to be hit by difficult economic conditions, despite an overall increase in revenues.

Average fee income at the UK’s Top 100 law firms increased by 4% on the same period in 2010. While one sixth of firms saw revenue growth of above 12%, a similar proportion suffered a decline of 4% or more.

Decline in growth was mitigated slightly by increases in fee earner head count and productivity, which rose by 3.1% and 2.8% respectively.

Stephen Hall, a tax partner at Deloitte welcomed the fee increases, but encouraged firms not to ignore the challenges they continue to face.

He commented: “Litigation has performed reasonably well but low levels of M&A activity means that corporate revenues remain lacklustre.

“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

Generally growth was achieved by the larger firms operating in more buoyant overseas markets. These firms were able to benefit from the weak pound, which resulted in overseas revenues contributing more in sterling terms.

However, businesses operating principally in the UK continued to find conditions tough.

This was posted in Bdaily's Members' News section by Ruth Mitchell .