In isolation, UK fee income performance appears strong, with 89% of firms showing fee income growth compared with 84% the previous year. However, the average rate of growth across firms has declined against 2018, from 8.3% to 5.9%. Last year, half of Top 10 firms grew fee income in excess of 10%; this year, none exceeded single digit growth. Despite nearly a quarter of Top 11-100 firms recording double-digit fee income growth this year, that fell from 38% in 2018.
It is clear that there continues to be significant pressure on profits in the UK legal sector. For example, in the Top 51-100, all firms increased fee income, but nearly a third experienced profit falls.
Average profit per equity partner (PEP) continues to grow and has reached record highs across all bandings, but this is generally due to movement (or management) of partner headcount.