Law Firm Benchmarking: Regional view
It is not just City firms that have had a challenging year, as almost 30% of regional firms experienced a fall in revenue, compared to 20% in 2017. However, of the firms that did experience growth this year, a slightly higher proportion compared to the previous year, saw an increase of more than 10%.
Like their City counterparts, equity partners in regional firms fared reasonably well this year, with a average increase in PEP of 6%. The trend among regional firms has continued to reflect a challenging legal market. We note that last year was described as being somewhat sluggish compared to prior years and the proportion of firms experiencing growth of more than 10% remained more or less the same as last year.
This year’s results reveal there is a struggle among firms to maintain market share with a higher proportion of firms experiencing falling revenues. Though overall, the aggregate rate of growth was better at over 6% this year
compared to just over 4% last year.
As with City firms, a good proportion of regional firms reported positive movements in PII costs, with 50% seeing adecrease compared to last year. Firms of all sizes need to continue to proactively assess their risk and exposure to claims to handle a potential hardening in the market over the coming year.
Equity partners benefit from a rise in PEP
This year, 64% of firms reported an increase in PEP, compared to 60% in 2017. Slightly behind the performance of City firms, the average PEP rose by 6%. This is ahead of the average regional increase of 5% seen last year. In the context of a higher proportion of firms seeing a fall in revenues, is this indicative of a trend amongst a
smaller number of successful firms taking a larger proportion of the market share from their competitors?
Despite a fall in revenue, regional firms continue to invest in staff