Accessibility Links

Recovery falters for UK lawyers

Posted by: Laurence Simons 10/06/13

It's not quite the oldest profession, but one bonus of becoming a UK lawyer is that you're unlikely ever to find the trade become entirely defunct, like the majority of miners during the 80s or cinema projectionists.

However, the latest quarterly law firm survey from audit company Deloitte has found that the expected economic recovery among British legal organisations has not materialised quite as planned, with revenue growth dropping to less than half of what was seen last year.

Fee income across the group expanded by just 2.6 per cent, as confirmation of the first formal financial results begins to trickle out from the country's top firms, reports Legal Weekly.

Deloitte professional practices partner Jeremy Black said: "While the averages look quite benign they mask a lot of differentiation - the market is becoming increasingly polarised between those that are succeeding and those that are struggling."

There has always been an element of sink-or-swim in the UK's legal market, but this appears to represent a growing global trend. Those firms that can afford to diversify into new markets to join up with major overseas companies are keeping their heads above water, while their smaller counterparts are walking the plank.

Mr Black added: "There's not much movement in pricing, which means that, unless you can cut costs, your profits are going to fall, so in the long term there are some real challenges for law firms."

Much of the revenue growth that did occur was driven by increases in fee earner headcount rather than an improvement in how much businesses could charge - for instance, the tie-up between Pinsent Masons and McGrigors.

While the results are disappointing, the sector remains in relatively good health compared to many other UK industries, and there's no doubt that those firms that can afford to diversify their practice will be able to ride out the current economic turbulence.