Debt levels among some of the UK’s largest law firms rose significantly during 2016/17, exclusive research by The Lawyer has indicated.

Total borrowings last year among the 82 firms that provided data relating to debt for the UK 200: Financial Management report, which will be released on Monday (13 November) stood at £375.8m, an average of £4.58m per firm. The previous year 88 firms had total borrowings of £349.2m, an average of £3.96m per firm.

While direct comparisons cannot be made, as the number and identity of firms that provided data differs marginally year on year, the overall trend appears to be up (the full report includes specific and attributed data on individual firms’ debt and lock-up profiles).

In contrast to the rising debt trend a number of firms reported cash stockpiles that have been growing in recent years. For the first time this year The Lawyer asked firms to report the level of cash they had at year-end. A significant number of firms that had borrowings also had cash in the bank at year-end, with many posting a cash surplus.

Osborne Clarke, which had total borrowings of £2.3m but a net debt of £27.5m, had the highest cash surplus of all of the firms in the UK 200 sample in 2016/17, with £29.8m in the bank at year-end.

Managing partner Ray Berg said that while the use of technology was important in terms of financial management, the key was human interaction.

“We work very closely with the finance team, pay close attention to some key metrics, and encourage our people to speak with our clients,” said Berg. “It’s part of the client relationship management process, a fundamental part of it. Also we simply don’t want to be indebted. We took out a small loan for fit-outs and amortised the lot, but we don’t want to be borrowing to pay drawings. That’s the start of a slippery slope.”

Berg added Osborne Clarke requires a minimum cash balance before it can pay out drawings, which he described as part and parcel of being “a prudent business”.

“We also need to invest to innovate so we need cash to invest in tech, infrastructure, people, that’s what we’ve been using the money for, though we take a relatively considered approach to investment,” added Berg. “We’re custodians for the next generation of people.”

The total cash that the 92 firms which provided data had in the bank at the 2016/17 year-end was £290.5m. The total net debt across the 95 firms that provided data stood at £107.1m last year.

The Lawyer UK 200: Financial Management report is one of five data-led reports in The UK 200 series. To purchase any of these reports please contact either Gilberto Esgaio on +44 207 970 4191 or or Letitia Austin on +44 207 970 4662 or