Given the natural conservatism of the legal market both in the UK and globally, when the leader of one of the UK’s largest law firms describes the pace of change in the sector as “glacial” it’s a definite sign that a dramatic move is long overdue. Because after years of discussion about globalisation, consolidation and the Legal Services Act (LSA) revolutionising the market, the reality is that much of this transformation is yet to happen.
Analysis of the financial performance of the UK’s top 50 firms shows a sector that, while strong enough to produce a fourth consecutive year of revenue growth despite some pretty wobbly economic conditions, is ripe for change. And that change is most likely to come through consolidation. The five magic circle firms brought in £5.5bn last year – an impressive performance and certainly the best average showing across the legal elite in several years. But this figure equates to more than the revenues of all of the firms ranked from 11-50 combined. It is still a long way off the market domination of the big four accountants, but it demonstrates in an instant both the opportunities for consolidation and the difficulty in comparing businesses that are becoming increasingly disparate in nature.
