The U.K.’s top 50 law firms are struggling to improve their profit margins amid steadily rising wage costs, according to a comprehensive analysis of limited liability partnership accounts by audit firm Smith & Williamson.

The average operating profit margin across the largest firms fell to 29.7% in the financial year to April 2020, down from 32% a year before, the latest LLP accounts showed. This was the lowest margin since the auditor began analysing the data seven years ago.