Law Firms

97% of top UK law firms outperformed profit expectations, PwC reveals

The majority of UK law firms ‘reacted swiftly’ to the operational and market changes during a period of continued lockdowns to record ‘strong positive financial results’

97% of the top 100 UK law firms have outperformed their revenue and profit expectations in 2021, revealed PwC’s 2021 Law Firms Survey.

Despite four in five of the top 100 firms predicting falls in fee income for FY21 in last year’s report, PwC’s analysis shows that the top 10 and 26-50 bands have posted a boost in profit of 23% and 21% respectively. 

This is closely followed by a growth of 13% across the top 11-25 firms and 17% in the top 51-100 band.

Additionally, 74% of these firms have reported an increase in fee income, with 76% posting profit increases.

According to the survey, the majority of law firms “reacted swiftly” to embrace operational and market changes during a period of continued lockdowns to record “strong positive financial results”.

Kate Wolstenholme, PwC’s Law Firms’ advisory leader, said: “These are fast moving and exciting times for UK law firms as they continue to adapt to operating flexibly in a post-pandemic climate. Law firms have experienced significant disruption over the last 18 months and most firms have been agile in fast-tracking changes in their working culture. 

“As we move forward, we will see how law firms best respond to challenges, both old and new, such as adopting hybrid working in a way that retains talent, capitalising on investment in technology, and delivering on ESG promises including diversity and inclusion targets, climate related goals, and social responsibility.”

Leon Hutchison, co-editor of PwC’s Law Firms’ Survey, said: “While many firms have fared well through these tough times, it’s crucial that they don’t rest on their laurels as old challenges, and many new ones, no doubt lie ahead. 

“The unpredictability of Covid-19 is still a great concern for two in three UK Top 100 firms and they would do well to continue with scenario planning for a range of different events so they can react well to future changes in the economic and working environment when, and if, they arise.”

He added: “They have shown their mettle and agility over the last year. Those firms that can continue to embrace and invest in the learnings of the last few years will be well placed to meet the challenges that lie ahead and face the future with confidence.”

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