The United Kingdom’s top 50 law firms have achieved their second year of double-digit revenue growth with an increase of 14% and profits per equity partner up by 13.5%, according to a new report.
The 14% revenue increase outpaced the average revenue increase of 12% at top U.S. firms, according to Legal Week’s 2006-07, a report by the London-based legal publication. Legal Week is a part of Incisive Media, which recently announced it was purchasing ALM, the parent company of The National Law Journal.
The 13.5% increase in profits per equity partner also beat out the 11.2% increase at U.S. firms in 2006, according to the report. Partly thanks to the strength of the British sterling, which is now worth slightly more than $2 U.S. dollars, U.K. firms matched or outpaced profits at most comparable U.S. law firms, except for Manhattan boutique firms such as Cravath, Swaine & Moore. The report also credits London’s busy securities and mergers and acquisitions markets over the last year.
At U.K. firms, average profits per equity partner rose from about 500,000 British pounds in 2006 — or approximately $1 million in U.S. dollars to $569,500 British pounds this year, or about $1.2 in U.S. dollars, according to the report.
As far as revenues, there was little change in the top five firms from 2005/06, with Clifford Chance, London’s Linklaters and London’s Freshfields Bruckhause Deringer keeping their top three spots respectively. London’s Allen & Overy remained in fourth place for total revenues, while DLA Piper moved up one spot to fifth place, switching places with London’s Lovells.
Clifford Chance, which averaged 608 partners for the year, had revenues of nearly 1.2 million in British pounds, or about $2.4 million in U.S. dollars.
Overall, total revenues for the top 50 U.K. firms reached 10.5 billion in British pounds, or $21.5 billion in U.S. dollars.
The report shows the U.K.’s four largest firms � typically referred to as the “magic circle” firms � accounted for nearly 40% of the entire top 50′s income. London firms continue to expand, according to the report, with total fee earners up from 37,000 to about 40,000 and total partnerships up by 4.7%.
• Legal Week‘s Top 50 U.K. Firms: In Numbers
Editor’s note: ‘Turnover’ in the chart refers to ‘revenues.’