For this year's UK Top 50, Legal Week has spoken to law firm leaders across the market for their take on the key trends from 2016-17, as well as their plans for the year ahead. In this Q&A, Pinsent Masons senior partner Richard Foley discusses the impact of currency on the firm's performance and upcoming challenges for 2017-18

How was your year last year? "We have had a strong year, 11% growth, which puts us in the front of the pack. We are in a good space having also invested heavily in the UK in the last two or three years. We have also invested significantly overseas, opening seven offices in the last two years or so, with openings last year in Johannesburg and Madrid. You want to see those come good and they have all made good, fast starts. Australia in particular has really gone well.

"It is still a difficult market so most of the big firms will be pleased with how they have done. Brexit definitely had an immediate impact but things picked up better than most of us thought."

Has currency inflation affected your results? "Obviously you have got foreign exchange movements and if you strip that out we still had 7% growth, which puts us right at the front of the pack in terms of our peers.

"In terms of foreign exchange rates, it was neutral from a profitability perspective; the weakening pound enhanced the revenue number but your cost base goes up if you are UK-denominated. It didn't artificially inflate the profit number so we were happy with that."

Do you think more firms will merge? "It is very early days for the CMS tie-up, one will have to wait a couple of years to see how that plays out. I think there will be more consolidation, it is quite a packed table. It will be interesting because when you look at the UK top 50 there are quite a lot of firms bunching around the £100m-£200m mark. I don't know if any one of them is going to do anything but it is interesting that Olswang and Nabarro were in that space and sought to do something to move out of it.

"KWM makes you realise you have to get this stuff right, you need to be in the right shape to do a merger and you have to get the merger right. That may cause one or two to pause and think."

What keeps you up at night? "The thing that keeps me awake at the moment is the creeping inflation in the economy. I don't think we have yet seen the impact of that. You start creeping up to two, three, four percent inflation and that creates very significant pressure. It will be interesting to see how that all plays out. Of all the macro trends, the underlying rate of inflation is one I pay most attention to."

Why do you think so many firms are cutting back partner and lawyer numbers? "Our equity partner numbers have gone up; our increase in profit per equity partner (PEP) has been nothing to do with shrinking the partnership – the opposite has been the case. I know other firms have taken steps over the last couple of years to drive partner numbers down, but we are a partnership that is growing and will continue to grow."

What are the prospects for 2017-18? "We have made a good start with a strong first quarter. Our momentum from last year has continued through the summer months. We are very happy with the way we have started the year but a lot does depend on what is coming out from the government in terms of Brexit. Like many of our competitors, the UK is a major market for us. If businesses start to pause, hold back and slow down their investment decisions while waiting to see what will happen, it is inevitable that that will have an impact.

"The key thing is: there will always be lots of work, you just have to be better than the competition in terms of winning it. Whether the market is good or bad, you have to be innovative in the way you deliver legal services, stay close to your clients and be sure they will choose you over the competition."

For more, see: