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The UK's 50 largest law firms brought in more than £22bn between them during 2017-18, with a strong performance in the face of economic and political uncertainty helping drive average profit per equity partner (PEP) across the group above £700,000 for the first time.

Legal Week's annual ranking of the UK's 50 largest commercial law firms – which for the first time this year will be followed by a ranking of the next 50 firms – shows combined revenue grew 12% year on year to a new high of £22.5bn in 2017-18, up from £20.1bn last year.

Even when stripping out growth from major mergers, the group still performed strongly, with total revenue climbing 8%.

Mergers or combinations accounted for in the rankings this year include Eversheds and Sutherland Asbill & Brennan, the three-way tie-up of CMS, Olswang and Nabarro, and Kennedys' combinations with US firm Carroll McNulty & Kull and Manchester's Berg.

Taking into account the impact of mergers, the group's overall performance was slightly stronger than last year, when the 50 firms posted average revenue growth of 10%, in part lifted by gains from converting revenues into sterling when the pound was weaker.

Only three UK top 50 firms saw revenue fall year on year, compared with eight in 2016-17. All three – Hill Dickinson, Ince & Co and BLM – have a strong focus on insurance, although Hill Dickinson made the decision to offload its £23m insurance business to Keoghs during the year.

In contrast, 21 firms posted double-digit increases in revenue. CMS posted the biggest year-on-year increase, with revenue climbing 41% on last year after its union with Nabarro and Olswang, but those with the biggest increases without the help of a major merger were Fieldfisher (which posted its fifth consecutive year of growth, with revenue climbing 25.5%), Addleshaw Goddard (22.5%) and Macfarlanes (20.3%).

Commenting on the firm's year, Macfarlanes senior partner Charles Martin said: "We're very significantly exposed to the UK market, so when we're in the right place we see a disproportionately positive effect. But equally, if we are slightly in the wrong place we can be disproportionately negatively affected. It's been a very strong performance. Market conditions were benign."

Seventeen firms posted double-digit increases in PEP, seven of which saw PEP climb by at least 20%, including Macfarlanes, Travers Smith and Addleshaw Goddard.

Average PEP across the top 50 rose to new high of £719,000, up 5% from £682,600 last year, and 10 UK top 50 firms now have PEP of at least £1m, compared with nine last year. Hogan Lovells and Travers joined the seven-figure group this year, while Stewarts has fallen out of the top 50.

But while on the face of it, this measure looks strong, 10 firms saw PEP fall on last year and 26 achieved lower PEP growth than revenue, highlighting the struggle some firms are facing to translate revenue gains into bottom-line increases. Eighteen firms saw PEP growth exceed their revenue gains.

Looking at headcount, total lawyer numbers across the group broke the 50,000 mark – up 3% to 51,271, with total partners up 7% to 15,238. Total equity partner numbers climbed by only 1.6%, in part highlighting the control firms are continuing to exert over their equity, and in part skewed by some firms – such as Allen & Overy and Norton Rose Fulbright – changing the way they define equity partner numbers.

Stripping out growth from mergers, total lawyer and partner numbers across the group are each up by less than 2%, with relatively few of the largest firms focusing on headcount growth. The four largest-growing firms by partner count were Fieldfisher, CMS, Addleshaws and Kennedys, all of which grew by more than 20%, aided in part by combinations.

As always, the strong average performances across the group mark significant disparities in individual results. The strongest performances across the group tended to be in smaller, less internationally focused firms, such as City bellwethers Macfarlanes and Travers, as well as Fieldfisher.

Travers managing partner David Patient said: "Across the board, pretty much every one of our practice areas exceeded our expectations. When you get the stars aligning in the way they did last year and everyone is collaborating and feeding everyone else, it makes for a very strong performance."

At the top of the table, year-on-year growth at some of the largest firms has been impacted by exchange rate gains from converting the dollar figures reported by Legal Week sibling title The American Lawyer in the Am Law 100 into sterling. For example, DLA Piper posted a 6.6% gain in dollars but this equates to a 14% hike in sterling terms. Figures for Norton Rose Fulbright, Hogan Lovells and Eversheds Sutherland were also converted from dollar figures used in the Am Law rankings.

Looking at the four international magic circle firms, three of the quartet posted revenue gains of between 5.4% and 5.9%, with Allen & Overy slightly behind with a 3.5% increase. Clifford Chance posted the biggest increase in PEP among the group, with its 16.4% gain taking average PEP to £1.375m.

Looking to the year ahead, CC managing partner Matthew Layton told Legal Week: "We had a good year. For us, the global context is most important – more important than Europe and Brexit. There's an overall strength and confidence in the global macroeconomic outlook, even though there are clearly potential issues around security and the extent of the bubble created by liquidity and quantitative easing policies, and how that withdrawal will impact on global markets."

Herbert Smith Freehills CEO Mark Rigotti added: "I do feel like we're standing on the edge of a cliff. There are three things in particular we're keeping an eye on – Brexit, macroeconomic trends, and how affected deal activity will be by valuations being pushed up by the current frothy market. As valuations rise, even those with a lot of capital will say they're not prepared to pay that. We're watching that closely to see if deal activity rolls back a notch as a result."