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Travers Smith sees PEP soar by 24 per cent at end of strong 2011-12

There are returns to scale in every industry, which is why every industry has a trend towards consolidation over the long term. Law is no different, just at an early stage of consolidation for historical reasons, many to do with regulation. Over time a firm with £2 billion in revenues will be able to generate significantly greater economies of scale that one with revenues of £100 million. It may take those economies (relative to the firm withrevenues of £100 million) in a higher profit margin, or it may use them to lower prices, or may invest more in its business. The comment above about large firms operating with spare capacity at times - so do smaller firms, the numbers are less numerically but not so proportionately. Any firm which does transactional work (and Travers Smith does) with have fluctuations in utilisation throughout the year.

17-Jul-2012

1:38 pm