Global operating and financial performance

2015 Annual law firms’ survey

From a global perspective, expansion has continued, but the larger firms tend to be consolidating existing positions rather than investing further at this stage. Asia has proved a strong market for some (with Singapore, China and India as particular areas of future focus). Africa continues to offer a tempting opportunity for expansion into growth markets, but the landscape is complex and requires careful navigation.


  • Fee income in global law firms has improved slightly in 2015, although adverse movements in foreign exchange rates have significantly impacted consolidated Sterling fee income.
  • The UK continues to subsidise international offices and exchange rates have further accentuated the imbalance this year. UK profit per all partners is ahead of international by 74.4% (2014: 65.8%) in the Top 10 and 88.5% (2014: 66.8%) in Top 11-50 firms. Fewer chargeable hours and consequently higher fee earner staff cost ratio in international offices is the key differentiator.
  • International chargeable hours for the 1-5 years pqe grade are significantly behind UK offices (between 3% and 33% across the bandings) with the exception of Top 10 firms in the USA (no difference) and Top 11-25 firms in the Middle East (1% in excess of UK performance).
  • Top 11-50 firms continue to expand internationally, with mixed results as the range in performance widens. Average global net profit margins now range from 23.0% to 44.0%.
  • Notably, in net profit margin terms, the USA is now the best performing region outside the UK (Top 10 2015 of 35%), surpassing Western Europe (albeit with smaller offices).
  • UK top tier firms have fallen further behind the US top tier. While UK performance has improved, it does not match a strong year for the US top tier (although foreign exchange negatively impacts the UK top tier firms’ results). For example, US profit per partner at £1,468k is 36.2% (2014: 29.1%) ahead of the UK top tier (£1,078k).
  • If the UK top tier’s global net profit margin of 37% could match the US top tier’s of 46%, it would generate, on average, £115m of additional profit equating to £229k per partner.