First financial indications on 09-10 confirm early signs of recovery

A substantial number of the UK's leading law firms are set to post falling revenues for 2009-10, but partners are remaining upbeat after a year that has turned out better than many had predicted.

Early indications of the 2009-10 financial results for the UK top 50 suggest that a majority of firms will see revenues remain flat or marginally down on 2008-09 in the aftermath of the recession.

Major firms likely to see dips in revenue of 0%-5% include DLA Piper, Eversheds, Ashurst, Hammonds and Wragge & Co, while Simmons & Simmons, CMS Cameron McKenna and Halliwells are among those expecting declines of 10% or more, according to partners at the firms.

Faring better are firms as varied as Herbert Smith, Bird & Bird, Berwin Leighton Paisner, Clyde & Co, SJ Berwin, Olswang and Travers Smith, all of which are set to report modest growth.

Firms expected to post flat figures include Lovells, Norton Rose and Osborne Clarke.

Olswang managing partner David Stewart commented: "Overall there is a guarded optimism about the year ahead and we are being very careful to manage costs but at the same time are looking at areas of investment, especially internationally."

Eagerly awaited financial results for the magic circle are likely to show Linklaters and Clifford Chance (CC) posting drops in revenue of 0%-5%, while Freshfields Bruckhaus Deringer is on course to see a fall in turnover of 5%-10%.

Forecasts for profitability are less certain. However, it is expected that a number of firms will experience increases on last year's partner profits figures.

CC managing partner David Childs (pictured) commented: "As is usually the case, coming out of a downturn can be a bumpy experience and bearing in mind the magnitude of the events of the last two years, it is hardly surprising that this is the case this time around. Certainly, we are a long way from being back to the boom years, but the firm starts this financial year in very good shape."

Norton Rose chairman Stephen Parish said: "Both the Greek debt crisis – which has been resolved for now at least, albeit at great cost – and the political uncertainty in the UK have been destabilising. Despite this, I think the upward trend of business activity in the UK is likely to continue."

Travers Smith managing partner Andrew Lilley commented: "From October 2009, our workflow picked up unexpectedly quickly, principally linked to an uptick in private equity and litigation. So this year has been slightly better for us than we anticipated last summer when it was hard to see anything more than a pretty gloomy outlook. But right now, with a very new style of government and the situation in the Eurozone, predictions are, for different reasons, perhaps just as difficult as last year."

Additional reporting by Jeremy Hodges and Sofia Lind.