A spate of mergers continued to push up fee income at top-100 law firms in the first quarter of 2015-16, the latest edition of an authoritative regular survey shows today.
But concerns still remain that costs could threaten increases in profitability.
According to the latest figures from Deloitte’s quarterly legal sector survey, firms posted an average rise of 6.8% in fee income the first quarter of the financial year beginning 1 May 2015.
M&A activity in the last 12 months contributed to at least one-third of the overall increase, with an increase in the average hourly rate also contributing to the growth.
Outside the top 50, fee income rose by 13.6%, with half of the increase generated by a 7.4% rise in the number of fee-earners.
Meanwhile average fee income among the top 10 remained flat, largely due to the impact of currency exchange fluctuations and the challenge of practising in 'certain overseas locations'. But despite this, average fees per fee-earner rose 4%.
Jeremy Black, professional services parter at Deloitte, said: ‘The increase in average rates is most likely the result of a general softening in the external pressure on rates, as well as the impact of the work firms are doing on pricing and legal service delivery.
‘On average, firms have had a reasonable start to the first quarter of the new financial year. However, many remain concerned that rising costs could make it difficult for firms to maintain and increase their profitability this year.’