2019 Law Firm Benchmarking  

Against a backdrop of another year of political and economic turbulence, this year’s snapshot of the legal industry's performance in the UK makes interesting reading.

The big picture

Despite the uncertainty created by Brexit and its associated political fallout, this year’s headline results show another steady performance, with aggregate growth across all participants falling back slightly to 6.5%. Looking beneath that headline growth figure we find very mixed results. Participants have also increased their total profit pool by 9% but this masks some considerable variation between firms. The number of firms growing their teams fell slightly to 64%, although it was the city firms who made the greatest investment in headcount, almost doubling that of the regional increase.

      Revenue
     
- Growth in revenue

  Profitability 
  - Profit per equity partner
                    People 
                    - Increase in headcount
Growth pep
People 

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City firms

It has been another competitive year in the City with the proportion of firms reporting a fall in revenue this year rising to 17%, up from the 10% we reported last year and 8% in 2017.

83% of firms reported growth this year, a reduction of 7% from last year.

However, many firms grew both revenue and profit and a 5.4% increase in headcount shows a confidence with firms continuing to invest in building their teams. 

City firms growth

 

remote working

Participants also have clear plans to increase their level of agile, remote and virtual working over the next 18 months and the loss of key people was reported as the primary business critical risk.  

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Regional firms

regional growth 

We didn’t expect a spectacular year for regional firms given the current climate but many firms will be pleased with this year’s results, particularly equity partners who enjoyed growth in PEP. The increase in revenue was steady at 6% across all regional participants, but the proportion of firms who grew their top lines is back up to 78% – reversing a long-running trend. This year, only one in five firms reported a fall in revenue down from our 2018 benchmarking results, where 30% of participants reported a shrinking top line.

Nearly half of our participating firms enjoyed growth in PEP of more than 10%, which is especially good news in a period when the wider economic mood might have suggested a different story.

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 Regional firms PEP
lighthouse-at-sunset

Where next?

Firms are remaining positive about their own future performance and focusing on controlling the controllable rather than worrying about the headlines. Retention of key people and cybercrime and fraud resilience have become firms top business critical risks.

Our Professional Practices team

Our professional practices team advises law firms of all sizes on their growth plans, always tailoring our advice to best suit their needs.
Louis Baker
Louis Baker
Partner, Head of Professional Practices
London
Steve Gale
Steve Gale
Partner, Professional Practices and Head of Audit
London
Ross Prince
Ross Prince
Partner, Audit
Midlands