UK firms in line for solid financial year as Deloitte survey predicts revenue rises
Deloitte survey finds UK top 100 firms averaged 7% revenue growth in Q3 as largest firms took a hit from exchange rate fluctuatons
March 08, 2015 at 08:00 PM
2 minute read
The UK's top 100 law firms saw revenue climb by 7% during the quarter ending 31 January, according to the latest market research from professional services giant Deloitte.
The long-running research found fee income rose by 7% across the group for the third quarter of the current financial year, compared with the same period in 2014. Consolidation helped drive growth, with firms in the 51-100 category seeing growth of 15% during the quarter, compared with 3% for the 10 largest UK firms and 4% for those in the 11-25 bracket.
However, markets remain challenging in some overseas jurisdictions and the impact of this, combined with exchange rate movements, has negatively impacted sterling fee income, with revenues from continental Europe translating to a lower value now than last year. This has led to an overall fall in fee income for some of the larger firms.
Fees per fee earner grew by 3% on average and 4% for firms outside the top 10. Chargeable hours per fee earner remained static at around 280 for the quarter, suggesting that either hourly rates have increased or that firms are recouping a larger percentage of their fees in the more benign market conditions.
According to Jeremy Black, a partner in Deloitte's professional practices team, average growth across the first three quarters of the 2014-15 financial year also stood at around 7%. He predicts annual growth will come in at 6%-7% across the group as a whole.
Black said: "This quarter's survey results are in line with the performance seen in the previous two quarters, indicating a relatively stable environment for firms operating in the UK. Outside of the UK, however, certain markets remain challenging. Sentiment for the remainder of the year to 30 April 2015 is reasonably positive."
Deloitte's survey comes as a host of US firms announce solid results for the 2014 calendar year. Average revenue growth across 23 of the largest US firms to have announced so far stands at 5.8%, though there are significant differences in individual performance across the group.
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