Law firms hope improvements in business confidence will lead to new instructions

Fee income at the UK’s Top 100 law firms decreased by 4.3 per cent in Q4 (quarter ended 30 April 2009) compared with the same period last year, according to the latest figures from business advisory firm Deloitte.

As many firms’ annual results are being released, Deloitte’s Quarterly Legal Sector Survey found that performance in the sector has continued to decline with the Q4 results having a noticeable negative impact on firms’ full year results. 

Chargeable hours per fee earner fell by 7.1 per cent compared with the same quarter last year, with the decline for ten top firms greater at 11.5 per cent.

The results for the full year to 30 April 2009 show that despite an average fall in chargeable hours per fee earner of 6.8 per cent to 1,053 hours, firms overall did achieve a small increase in fee income of 1.7 per cent. The increase in fee income was achieved despite the fall in chargeable hours per fee earner as a result of the relative decline in sterling, which had a particularly large effect on international firms, and the lag between work being performed and billed.

Anna Marks, audit partner at Deloitte in Birmingham, said: “Whilst attention is currently focused on the annual results being disclosed by firms, the significant fall in chargeable hours per fee earner in the fourth quarter demonstrates just how tough things are for law firms currently. 

“There can be little doubt that with productivity falls of this level further turmoil in the sector is inevitable.  Many firms will be hoping that they start to see an improvement in their results through an increase in new instructions as business confidence improves and – importantly – the full effect of recent cost control measures”. 

– Ends –

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