UK legal industry turnover surges to new record
Sector-wide billings rise 30% in March to reach an all-time high of £4.06bn
The UK’s legal sector’s turnover surged to a new record in March, painting a healthy picture for the industry a year into the Covid-19 pandemic.
According to figures released by the Office for National Statistics, turnover rose an all-time high of £4.06bn compared to £3.1bn in February, representing a massive 30% increase in revenue.
This year’s March revenue figure is significantly higher than the previous year when turnover for the legal industry sat at £3.3bn, which was largely booked before the UK’s first national lockdown that began on 23 March 2020.
The year-on-year jump represents a 19.8% increase in total revenues for the resilient UK legal industry, the stats-keeper revealed.
While March and April generally stand as the most prosperous fiscal months for UK law firms as they approach their financial year-ends, the previous highest-billing month on record clocked in at £3.57bn in December 2020. The latest revenue figures edge out December’s impressive showing by 13.9%.
Julie Norris, regulatory partner in legal services at Kingsley Napley, said: “This is tremendous news for the legal industry across the UK. After the instability of the past year, the sector has shown resilience and is dashing to keep up with an explosion in demand.
“Firm leaders should however take care that the pressures of keeping up with growth on staff wellbeing, on culture and on regulatory compliance are managed to ensure that serving short term demand doesn’t leave firms exposed in the medium term.”
Overall, the rate of growth exhibited by the legal industry managed to outpace that of the combined UK services sector, which grew by 24.2% month-on-month to £196.8bn.
Tony Williams, principal of Jomanti Consultants and former managing partner of Andersen Legal and Clifford Chance, forecasted a positive year ahead as firms begin to emerge from the pandemic.
“UK law firms got off to a slow start amidst the uncertainty in April and May last year, but have since seen robust activity particularly for transactional practices including private equity and M&A,” he said. “Firms have also benefited from cost-cutting measures put in place during the pandemic, and as a result profitability is likely to be good.”
He added that despite strong showings from UK law firms over the last year, they are unlikely to reach the heights attained by US law firms, which have been reporting “spectacular” figures despite pandemic strains.
On the other hand, Williams pointed to firms with large real estate offerings as a group that might face more challenges as the pandemic winds down.
US law firms saw impressive increases in 2020, with Law.com reporting revenue for the Am Law 100 grew 6.6% over the course of the year, hitting a record $111bn.