PwC research confirms hard year for top firms
The top 100 law firms have had a tough year, according to research from PwC.
It found that uncertainties in the economy have created difficult market conditions overall, while the impact of alternative business structures is beginning to bite as new entrants take a bigger market share.
Although 82% of firms increased UK fee income this year, much of the growth was due to mergers, acquisitions and lateral hires. Once inflation is taken into account, performance was broadly flat for the majority of firms.
The top 10 firms accounted for 44% of total fee income across the top 100, and continued to record significantly better results than the rest.
David Snell, partner at PwC, says: “Against a difficult backdrop, 2012 could be characterised as a solid year for the legal sector, with the gap between best- and worst-performing firms beginning to widen further.
“The big differentiator for the largest firms remains their higher chargeable hours, premium pricing and tightly managed fee-earner headcount. In the mid-tier, clear strategic focus is required and firms that deliver a quality client service in a niche area often do better than those which seek to provide a full service offering with no differentiation.”
More than half of the firms had completed a cost-reduction programme in the past two years, but the majority reported savings of five per cent or less.
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