What’s the prevailing scenario of law firms in London?

Law firms in London’s financial region have battered hard economic and political situations to pole development, exceeding that of local firms. However, as per the new research, firms based in this world-class city remain worried with undecided Brexit negotiations and augmented competition from professional services firms – both of which they believe pose a threat to their future success.

In today’s era of economic and political indecisiveness, many firms stayed cautiously hopeful about their growth forecasts. This year’s 7% collective growth was improved by the information that fewer than14% of firms faced a drop in their top line, with the general average rate of decline at less than 4%;levels far low the sharper drops that some firms encountered just a few years ago. However, there was also a big margin which rose up between City-based and regional firms in this year’s data.

The best year on year outcomes were among firms with turnover hovering between £10 million – £20million who witnessed average growth of more than 9%, while almost 1 in 5 firms with turnover below£10 million saw a decline in their revenues. Smaller firms had a more stimulating year, particularly those outside of the City, and while 80% of regional firms practised growth in 2016, 93% of City organisations saw the year derive better results.

Profit per Equity Partner (PEP) rose for 60% of contributing firms, with half of those seeing a surge of more than 10%. In the opposite, less than a third of those who witnessed a decline in PEP were legal firms in London with turnover below £10 million, and almost half of them were in the £20 million – £50 million turnover bracket. Low-size firms are enduring to hold onto top-tier equity and are, maybe, more able to rapidly respond to any uninvited change in their top line. However, again location deployed a role, and City firms of both sizes were more likely to register growth.

By contrast, regional law firms in London have had a more thought-provoking year: of the local firms that saw growth in 2017, only 28% witnessed revenues upsurge by over 10%, as compared to 33% of firms in 2016 and52% in 2015. Last year, CCW carried their benchmarking during the first few weeks of June, before the outcomes of the EU membership referendum were came out. With a further year’s reflexion to draw on now, and the triggering of Article 50 in March having caused the opening of exit negotiations, the report provides a key insight into how law firms think of the challenges they now encounter.

The UK is anticipated by many to decide to lose as many as 40,000 jobs in the financial services sector. While legal firms in London may not unswervingly be considering a Brexodus of their own due to the undecided negotiations between Britain’s government and Brussels, many are linked to financial services firms, who are either clients or portions of their business ecosystem. Were the number of investment banking jobs to vanish from the UK at the rate foretold, it could cause many Law firms in a perilous financial avenue.