Litigation and regulation take legal fees above £5bn

A RISE in litigation and the current climate of stricter regulation helped profits at the UK’s 100 top law firms pass £5 billion for the first time.

Research by Legal Business magazine found that the billings at the UK’s 100 largest law firms increased by 17 per cent in the year to April, to £17.7bn. Profits grew by 8 per cent to £5.4bn.

Editor Mark McAteer said that a number of mergers among top firms flattered the figures, but on a like-for-like basis firms grew by an average of 6 per cent, which was reflected in staff numbers.

He said: “Despite the dismal economy of the last four years and the current double dip recession, our legal industry is in rude health.

“The top 100 firms employ more than 100,000 people and make a significant contribution to the UK economy. Their success extends far beyond the UK and should be celebrated.”

McAteer said that the industry had adapted since the financial crisis, with lawyers having to find alternatives as corporate deals and property transactions dried up.

Increasingly, firms were offering advice on regulatory matters, especially to financial firms facing stricter rules and tougher penalties, he said.

There has also been an increase in restructuring work, while the economic difficulties faced by many businesses have led to a rise in disputes and resulted in more litigation.

The Legal Business survey of the UK’s top 100 law firms was first published 20 years ago when the top 100 firms collectively billed their clients just £2.7bn and made profits of £891 million.

At that time, just ten firms employed more than 100 lawyers, whereas today the UK’s largest law firm employs more than 4,000 and all but one firm in the top 100 employs more than 100 people.