Triumph of the mid-market

This was the year of the mid-size. When Berwin Leighton Paisner (BLP) released its 40 per cent profits hike in May, some thought it was a blip. It wasn’t.

The Lawyer’s top 50 is a preview of The Lawyer UK100, out in September. Most figures are still provisional at this stage, so readers should refer to the full report in two months, but already a clear trend is emerging.

The top 50 firms’ revenues and profits table confirms that the magic circle’s dominance of the legal market took a knock last year.
Magic circle firms are still on the whole recording average profit per equity partner (PEP) in the £600,000 range (except for Clifford Chance, which dropped 13 per cent to £558,000), but there are plenty of firms comfortably recording average PEP in the upper £400,000 range – and gunning for more next year.

BLP, DLA, Nabarro Nathanson and SJ Berwin posted significant increases in both profits and turnover. Notably, all four have a good spread of business between corporate and real estate. The dearth of major M&A, not reflected in last year’s figures, has finally been felt by the biggest firms in the market.

However, premier firms Allen & Overy, Clifford Chance, Freshfields Bruck-haus Deringer and Linklaters were not this year’s worst performers in profit terms.

Hammonds and Wragge & Co, two national players which performed strongly up until a couple of years ago, had disappointing profits figures. Wragges’ dropped by 17.6 per cent to £210,000 and Hammonds by 17.5 per cent to £272,000. Yet there is nothing inherently frail about the national model. Eversheds’ profits were up by over 7 per cent, while DLA is consistently able to parlay its small equity partnership into high profits – unlike Wragges, which has all equity partners.

At the other end of the table, the strong profits performance turned in by regional firms such as Osborne Clarke and Shoosmiths, where average partner remuneration rose by 30 per cent and 66.5
per cent respectively, was matched by the new entrants to the leading pack. Leeds-based Walker Morris, Newcastle’s Dickinson Dees, Manchester’s Halliwells and Bristol’s Burges Salmon all enter the charts with solid turnover increases.