London has strengthened its position as one of the top global centres for legal services in 2007/08 according to IFSL’s – Legal Services 2009 report. UK firms are expected to maintain their strong international position in 2008/09 as they rationalise their operations in response to the credit crisis, in common with law firms around the world.
Based on fee revenue, in 2007/08 the largest three global law firms were from the UK, while on head-count UK firms held five out of the top seven places. The IFSL report says that most UK firms amongst the top 100 have improved their ranking during the year. This was largely due to the combination of strong growth at UK practices, strength of the pound against the US dollar during the last financial year and UK law firms’ international expansion in recent years and focus on key emerging markets such as the Middle East and Asia.
Fee income of the largest 100 law firms in the UK increased 14% in 2007/08 to a record £14.0bn. Much of this growth came in the first half of the financial year as the effects of the credit crisis spread to international markets in the second half. This resulted in less revenue in practice areas such as merger and acquisition and capital markets advisory. Revenue in 2008/09 is likely to be flat or slightly down on the previous year.
Marko Maslakovic, IFSL’s Senior Economist said, “In response to falling revenues in 2008/09, UK law firms are cutting costs by reducing partner numbers, moving lawyers between practice areas and diversifying their international exposure. There is no indication that international law firms are planning to reduce the scope of their overseas networks.”
Andrew Cahn, UKTI Chief Executive Officer said, “Not only is English the language of international business but English law is globally recognised to be fair, transparent and dependable. In the current global downturn, now is the time for UK legal firms to look into diversifying into new markets or strengthening their position in established ones to reduce risk. Despite the current global slowdown there remain opportunities within areas of the legal profession and the UK is well-placed to make the most of these.”
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