Lawyers set for record-breaking year as billings soar

Britain’s legal profession has grown by more than 12 per cent over the past year, far outstripping the wider professional services market.
Lawyers were said to be on track for “a record-breaking” year after figures from the Office of National Statistics showed that they had recorded their second highest monthly billings on record.
On a national level, lawyers recorded total revenue in June of more than £4.3 billion, compared with about £3.8 billion for the same month last year. That puts the legal profession on track to generate nearly £52 billion for the current financial year, adding about £8 billion to the previous year’s total. According to the figures, April was the most profitable of the past 13 months, with lawyers generating revenue of nearly £4.8 billion.
The statistics office reported that the UK legal services market had grown by 12.4 per cent over the 12 months to the end of June, despite professional services growing by 4.5 per cent overall during the same period.
“The UK’s legal industry appears set for a record-breaking year after two strong quarters of results,” Julie Norris, a legal services regulatory partner at Kingsley Napley, a London law firm, said.
Most of the growth in legal services revenues will have come from increased activity at City law firms and large national commercial practices, notably from a resurgent mergers and acquisitions market. Last month, a report from EY, the accountancy firm, reported that UK-based financial services groups had recorded the largest half-year increase in the number of deals in the past decade. Banks, insurers and asset managers disclosed 175 deals over the first half of 2024, a 10 per cent annual increase. According to EY, total deal values reached £6.9 billion in the first half of the year, up from £5 billion in the first half of 2023.
Some of the money from the resurgence in dealmaking has fed through already to partners in City law firms. A&O Shearman, the Anglo-American practice, revealed in July that its top equity partners had earned on average £2.2 million on the back of a 17 per cent increase in annual pre-tax profit.
However, costs are also rising sharply in the City, notably with junior lawyers’ pay, with salary inflation being fanned by American firms in London. Gibson Dunn, a firm founded in Los Angeles, tops the junior lawyer league table in the Square Mile, paying its newly qualified solicitors £180,000. A&O Shearman and other domestic “magic circle” firms trail £30,000 behind that rate.
Norris warned British law firms not to be complacent as the boom times for commercial lawyers came with strings attached. “With the pace of change in technology increasing and amid consolidation in the market, including investment from global consulting firms, leaders should not be resting on their laurels,” she said.