Global operating and financial performance
2013 Annual Law Firms’ Survey
UK firms have developed significant global operations over the last 10 to 15 years, with 53% of Top 50 firms now generating at least 20% of their revenue from international locations.
Against a backdrop of rapid globalisation, it is increasingly important for firms to operate across a range of locations in order to serve their client base and attract new clients.
- Top 10 firms have consistently improved across each key financial KPI, albeit only to a small degree. In contrast, Top 11-50 have experienced a reduction across all financial KPIs.
- The range of global net profit margins for Top 11-50 firms has widened in the current year, suggesting that certain firms are making the global offering work for them while others are struggling to maintain profitability.
- Among global law firms, UK offices are generally supporting the profitability of their international counterparts; average Top 10 UK profits per fee earner is 52.3% ahead of international.
- Global profits, relative to fee income, for the top-tier of UK-headquartered law firms (being UK-headquartered firms with global revenue over £1bn) still fall considerably short of the leading US firms. For example, top tier UK firms achieve net profit margins of 37% and this is 9 percentage points below the US top tier at 46%. If the UK top tier were to match the US top-tier margins, this would equate to an average of £126m additional net profit per firm.