SUBDUED growth has driven top law firms to lower their expectations for annual fee increases this year, despite a buoyant start to 2013.
According to a survey from business advisory Deloitte, the UK’s top 100 law firms by revenue have revised down their expectations for annual fee increases to 3.3 per cent, from 5.7 per cent at the start of the year.
The top 10 firms achieved a growth rate almost double the sector average at 7.4 per cent, Deloitte said, but are even more downcast in their estimates this year, expecting a total annual fee rise of only 2.7 per cent.
The downward revisions come despite a positive start to the year. The top 100 firms saw their income grow by 3.5 per cent in the three months to January, compared to the same period last year.
“Law firms are right to be cautious as the domestic market remains fiercely competitive whilst pressure on rates persists,” Jeremy Black, partner at Deloitte’s professional services practice, said this morning.
“Unfortunately, this has led to the sector forecasting annual income fee rises that are barely above inflation. With challenging economic conditions expected to continue, it has been necessary for firms to reconsider what margins can be achieved.”