Fee income rose 5.7% in the top-100 law firms for the six months to October 31 compared with the same period last year, according to research from accountancy firm Deloitte.
Revenue increased by 5.2% for the three months to October 31 compared with the same period last year, the Quarterly Legal Sector Survey research shows.
The results follow a ‘prolonged period of stagnation’ in the sector, Jeremy Black, partner in Deloitte’s professional services practice, said. ‘Hopefully, this is the start of a steady rise in activity for the domestic market.’
Income for the quarter rose 6.3% in the 10 largest firms. This was almost exclusively due to increases in rates.
An increase in fee-earner headcount was the main driver behind the 6.7% growth achieved by mid-tier firms.
Real estate and corporate performed particularly well due to an increase in bank lending and a rise in IPO and transaction activity, Deloitte concluded.
Firms are forecasting an 8.4% year-on-year increase in fee income for the three months to January 31 and 6.1% annual growth for the full year.
In the previous quarter ended 31 July 2013, merger activity accounted for half of all revenue growth.
Black concluded: ‘While last quarter’s results were strong, we can perhaps take more confidence from this latest set of results as a greater proportion of growth has come from underlying improvements, rather than mergers and acquisitions in the sector.’