UK law firms report flat revenues
Things are looking tough for law firms across the pond. As the financial results begin to roll in from U.K. law firms, the figures arent as rosy as many will like. And the blame firmly is being cast at the troubled European economy.
July 09, 2012 at 08:03 AM
3 minute read
The original version of this story was published on Law.com
Things are looking tough for law firms across the pond. As the financial results begin to roll in from U.K. law firms, the figures aren't as rosy as many will like. And the blame firmly is being cast at the troubled European economy.
Reuters reported last Friday that two of the U.K.'s largest law firms, Linklaters and Freshfields Bruckhaus Deringer, released financial results that indicated plateaued revenues and a decrease in profits per partner for the fiscal year that ended April 30.
Linklaters announced that its revenue rose a meager 0.6 percent last year to £1.21 billion ($1.87 billion). Conversely, the firm's profits per partner fell 3 percent to £1.18 million ($1.83 million).
“Over the last year, like many of our clients, we have continued to face volatile and challenging conditions amid wider economic strains,” Linklaters Managing Partner Simon Davies said in a statement. “In spite of those conditions, and in supporting our clients, our revenues and profits have remained stable and we have maintained our financial strength and ability to invest. We have sustained revenues in the developed markets supported by strong performances in areas such as litigation, competition and regulation and we have continued to grow organically in developing markets such as Asia.”
Freshfields announced that it grossed nearly £1.14 billion ($1.77 billion), which was down 0.7 percent from the previous year. Its profits per partner also declined to £1.31 million ($2.03 million), which is 1 percent off from the prior year.
Ted Burke, Freshfields' managing partner, said in a statement that 2011 was a good year for the firm, “especially when you consider the impact of the sovereign debt crises on transactional activity,” Reuters reported.
A Deloitte study released last month indicated that the U.K.'s 100 largest firms are expected to report a 6.6 percent annual increase in revenue, but at least part of that growth is as a result of mergers. Additionally, the report found that law firm revenue growth has been slowing since July 2011.
However, a pair of smaller London-based firms, Clifford Chance and Allen & Overy, reported somewhat better financial results. The reason for their growth, according to Reuters, was an aggressive expansion into new markets in 2011. The firms opened new offices in Casablanca and Istanbul, and added lawyers to extend their business reach in Australia.
For more on the stagnant revenue growth among U.K. law firms, read Reuters.
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