Drop in foreign earnings casts a shadow over Shadbolt & Cos award for exportsGOVERNMENT FIGURES: lawyers do their sums and question whether study reflects growthUK law firms overseas earnings have fallen for the first time in years, government figures have revealed.

But there are claims that the statistics actually mask strong growth.The news comes as Surrey-based Shadbolt & Co was named as only the third law firm ever to receive a Queens award for the export of legal services.

International Financial Services London (formerly British Invisibles), which promotes UK financial services worldwide, said earnings from exported UK legal services fell from 791 million in 1998 to 748 million in 1999, more than 5% down.An additional 62 million was generated by members of the Commercial Bar Association, a figure that has continued to rise.Jonathan Goldsmith, the Law Societys international director, said the fall may actually have resulted from City law firms global growth.

The government generates the figures from VAT invoices issued out of the UK and he speculated that firms overseas offices were billing locally, meaning the government would not have a VAT record.

He added: Nobody can deny that our law firms are growing around the world, but the question is whether local billing as well as billing out of the UK is included in the sums.

The legal professions contribution to UK exports has risen steadily over recent years.

In 1985, it accounted for just 155 million.

The report said legal services now represent 1% of the UKs gross domestic product.

Shadbolt & Cos award follows that of City giants Allen & Overy and Norton Rose in 1999.

The 22-partner firm, which is celebrating its tenth anniversary this year, has offices in Reigate, London, Paris and Hong Kong, and made its name in construction and major projects work.

International law is a demanding market and for a firm of our size to receive this is a tremendous boost, said senior partner Dick Shadbolt.Neil Rose