Five-year research highlights rapid growth for top firms with double-digit rises in turnover and partner profits

The past five years have seen a dramatic period of growth for the UK's top 25 law firms, despite many suffering steep drops in profitability during the past financial year.

Research by Legal Week shows that between 2003-04 and 2008-09, the top 25 UK law firms have averaged a 57.9% increase in turnover and a 38.1% increase in profits per equity partner (PEP), with turnover growing from an average of £262.8m in 2003-04 to its current figure of £414.9m. PEP, meanwhile, has risen from an average of £448,720 to £619,640.

Only a handful of firms have contracted by either turnover or profits during the past five years, with some firms more than doubling revenues over the period.

DLA Piper, Bird & Bird and Pinsent Masons have all achieved revenue growth of more than 100%, while only Denton Wilde Sapte and Hammonds have seen a decline in turnover – dropping by 2.4% and 7.8% respectively.

As a group, the magic circle has seen the biggest increase in profits over the period, on average increasing PEP by 78%, from £674,200 to £1.2m.

Freshfields Bruckhaus Deringer was the only firm to double PEP – rising from £675,000 in 2003-04 to £1.44m during the last financial year.Even Clifford Chance, which saw PEP plummet by more than 36% in 2008-09, has increased profits by over 32% in the five-year period.

Only three firms saw PEP contract over the last five years. SJ Berwin has experienced the biggest drop (18.8%), with PEP falling from £505,000 in 2003-04 to £410,000, while Dentons and Berwin Leighton Paisner have seen PEP fall by 7.7% and 2.5% respectively.

Jeremy Black, an associate partner in Deloitte's professional practices group, commented: "The last five years have been the end of a very long boom period and it is difficult to see how that will continue. There will be growth through bolt-ons and mergers, but people will not be expect-ing much organic growth."

See Legal Week's print edition for the full table of results.