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Legal jobs in London stacked significant cash last year as revenues top £5bn for the first time ever

Posted by: Laurence Simons 04/09/12

Top 100 firms team up to break revenue records.

The entire UK legal sector flicked dismissive Vs, smoked cigars and straight laughed in the face of economic turmoil this week, as research showed the combined profits from the top 100 law firms in the country over the past year have topped £5 billion for the first time ever.

According to Legal Business research, the top 100 firms - those that focus on corporate law, mergers and acquisitions, basically - billed £17.7 billion in the 2011/12 financial year, which minus all the costs for tea, coffee and expensive suits translated into £5.4 billion in profits. That's a leap of eight per cent on the previous year's figures, despite 'that whole recession thing'.

Wait for it Maths fans… yes eight per cent is a big leap. It's one fuelled in no small part by the latest craze among not-quite-Magic-Circle firms to partner up with multinational corporates, enveloping or being enveloped by large legal firms and enjoying a boosted overall revenue stream as a result. That's why firms such as Norton Rose are knocking on the door of the top ten UK law firms legal rankings. That's why Cameron McKenna's combined turnover stands at £692 million, not the piddling £227.6 million of the UK-only arm. And that's why, really, UK firms have managed to clock up such a huge leap in revenue.

So how much of the magic £5 billion figure is flattery to deceive? Sort of some, but mostly none. While large firms may well benefit from combined turnover streams and the UK legal top 100 is in disarray, lawyers at such firms are still pulling in some powerful figures: Legal Business research shows Slaughter & May's 723 lawyers each bring in £620,000 in fees each year, while seven or eight of London's big law firms are rewarding their partners with £1 million-plus salaries annually.

"Despite the dismal economy of the last four years and the current double-dip recession, our legal industry is in rude health," said Legal Business editor Mark McAteer. And rudest of them all is DLA Piper, raking in £1.4 billion in the last year. Magic Circle firms rounded out the top five, with Clifford Chance, Linklaters, Allen & Overy and Freshfields making up a familiar 'biggest firms by turnover' list, while deeper Legal Business analysis showed that the top 100 firms employ more than 100,000 people. Good work, law.