The U.K.'s top law firms have overcome continued uncertainty in the global economy to achieve a second consecutive year of growth, while top 50 firms push partner profits back towards a boom-time high.
Legal Week's 2011-12 results show that revenues across the top 50 have hit £12.96 billion -- 5.6 percent up on the equivalent 2010-11 figure of £12.27 billion. Top 50 law firms averaged income growth of 7.7 percent over the year.
However, much of the revenue growth was driven by consolidation, with five firms in this year's top 50 significantly adding to their fee income through domestic or international mergers.
Four of the fastest-growing firms by revenue undertook substantial mergers -- including DLA Piper and Clyde & Co. -- with consolidation contributing to a 6 percent increase in total partner numbers across the top 50.
Firms on average grew profits per equity partner (PEP) by 4.2 percent, pushing average PEP across the top 50 to £587,000, against an all-time high of £616,000 in 2008.
In contrast, the Magic Circle were relatively subdued performers, seeing turnover and PEP growth of 2.1 percent and 1.6 percent respectively. Clifford Chance had the best year of the group, posting increases in revenue and PEP of roughly 7 percent.
The Magic Circle has now performed below the top 50 trend in income and PEP growth for three years running, though the five elite London firms' average PEP of £1.3 million remains more than twice that of the top 50 as a whole.
Slaughter and May senior partner Chris Saul commented: "The macro-environment has, of course, been really challenging and, against that backdrop, law firm results which we have seen have looked encouragingly robust. This year has seen some law firm consolidation and, with the likelihood of ongoing economic uncertainty, it would not be surprising to see that continue."
The top 10 London firms outside the Magic Circle also fell behind trend, posting average growth of 3.2 percent against profits growth of 7.1 percent. And, despite their best efforts to close the gap with their Magic Circle rivals, average PEP is less than half of their larger peers at £601,200.
Many of the standout City performers sit lower down the rankings. Among those to report the strongest results was Bird & Bird, which posted a 9.5 percent income rise; Olswang, which saw revenues climb by 16.7 percent and PEP rise by 21.8 percent; and Travers Smith, which saw a 16.4 percent increase in turnover against a 23.7 percent rise in PEP. Like top 50 new entrant Mishcon de Reya, all of these firms achieved the growth organically.