A study found that out of the UKs ten fastest-growing firms in terms of revenues, five offered traditional private client services, such as family law, succession planning or private wealth
If law firms want to see growth, they should start offering private client services and targeting HNWs. That’s according to new research by Legal Business, which found that law firms focusing on private clients were among the UK’s best performing, driven by an expansion of their HNW offering.
The study, published this week, compared revenue and profit growth of the UK’s 100 biggest law firms in the 2012/13 fiscal year.
It found that out of the UK’s ten fastest-growing firms in terms of revenues, five offered traditional private client services, such as family law, succession planning or private wealth. Similarly, seven such businesses made it in the magazine’s top ten fastest growing firms by profit per lawyer.
Stewarts Law, a London-based firm with a big divorce and family law unit, for example, saw revenues jump 30 per cent in 2012/13 – the highest growth rate in the country – while profit per lawyer increased by 14 per cent. One factor in this might be the hiring of prominent family lawyer Helen Ward from Manches.
Similarly, Mishcon de Reya was the second fastest-growing firm both in terms of revenues and profit per lawyer, as it saw turnover grow by 21 per cent to £88.4 million and profit per lawyer rise by 38 per cent.
Beyond private client work
According to Mark McAteer, national editor at Legal Business, this was because since the beginning of the financial crisis, law firms specialising in private clients have expanded the scope of services offered to their HNW clientele. ‘It is because of their private client focus but not necessarily because of traditional private client work,’ he said.
He added that this ‘is a very clever strategy for law firms, as HNWs, who traditionally went to lawyers for issues such as trusts, family law and succession planning, often own and run multi-million businesses, giving [law firms] the opportunity to work on corporate law issues as well.’
Firms with a strong focus on private wealth, such as Gateley, Trowers & Hamlins and Speechly Bircham, also reported double-digit profit-per-lawyer growth (93, 26 and 13 per cent respectively).
However, it was not all peaches and cream for private client specialists. This was true in the case of Manches, where revenues dropped by 6 per cent and profit per lawyer decreased by 40 per cent, and Lawrence Graham, which reported an 8 per cent fall in its turnover and a 22 per cent fall in its profit per lawyer figure.
The study found that the UK’s 100 largest law firms employed more than 60,000 lawyers and had combined revenues of £19.1 billion in 2012/13, up by 8 per cent from the previous year.
Together, they reported profits of £5.8 billion, also an 8 per cent increase on the year before.