The UK’s biggest law firms did not snap into sustained recovery over the past 12 months, experts told the Gazette, as the 2010/11 financial year drew to a close last week.

On average, top-50 firms will report flat revenues and profits when they publish their 2010/11 financial results, predicted Jomati consultant Tony Williams and independent consultant Nick Jarrett-Kerr.

Williams predicted revenues at major firms will be up or down by around 2% on average compared to 2009/10, and profits will be flat or slightly down.

Jarrett-Kerr said he expected litigation firms, private client firms, firms that rely heavily on overseas work and firms in the public sector to buck the trend.

He said ‘better-managed’ firms that cut underperforming partners in 2009 and 2010 are currently looking to get rid of some ‘moderate’ performers.

Williams added that some partners have been ‘eased out’ before the start of the 2011/12 financial year.

They both predicted that sustained recovery might begin after the summer.

Williams said: ‘There are prospects for recovery but growth is still pretty anaemic.

'Firms may have more work, but there is a lot of pressure on pricing. And the big corporates’ balance sheets may look pretty good, but they’re spending it on buying back shares rather than doing new deals.’

Jarrett-Kerr said: ‘The next year doesn’t look much better than last for many firms. Optimism has gone down among managing partners in the past two to three months.’

Williams said there is now ‘clear blue water’ between firms that restructured after the financial crisis and those that did not. He said international firms have suffered from the devaluation of sterling over the past year and will not, therefore, reap the ‘flattering’ currency gains they did in 2009/10.

In 2009/10, profitability generally picked up at top-50 firms, as revenues slid. Cuts to partner headcount and reductions in support-staff numbers after the financial crisis, as well as pay freezes and non-payment of bonuses, were cited as reasons for this.

A survey carried out recently for the Gazette suggested that many law firms are optimistic about the future.