The UK’s top 100 law firms enjoyed average fee income growth of nearly 8% in the third quarter of the financial year. However, the City’s elite grew slower than their mid-tier rivals.
According to the Quarterly Legal Sector Survey, fee income grew by 7.7% in the quarter ended 31 January 2018, compared with the same period last year.
The survey, by professional services firm Deloitte, said the increases had been driven by rises in fee-earner headcount and fees. Both increased by an average of 4% across the top 100.
However, despite an overall increase to fee income, there was a significant difference between law firms.
None of the top 10 grew fee-earner headcount, while those in the 11-50 bracket grew by 6%. The firms ranked 51-100 increased their headcount by 3%.
Deloitte attributed this to stable fee-earner numbers and continued pressure on rates at the top 10.
There was a 9.6% increase in fee income for firms ranked 11-25. Firms in the top 10 reported lower growth of 2.5%.
Jeremy Black, partner in Deloitte’s professional services practice, said: ‘This has been another robust quarter for firms in the legal sector, in particular the small to mid-size firms. While all firms are facing a number of challenges, overall performance remains strong.’
Black said that although firms remain cautious about the future, the underlying data shows that the market remains resilient.
The survey also found that participants expect a slow fourth quarter, with fee income forecast to increase by 4%.