The pace of recovery across top-50 firms started to slow in the first half of 2014, research from the Law Society and Legal Monitor City Legal Index suggests today.

In the first two quarters of 2014 the total number of deals involving the top 50 increased by 7.1% to 1,491, according to the City Legal Index Quarter 2, 2014 (mid-year update) report. However, this was a drop in the overall pace of growth for 2013, when the number of deals rose 12.4% on the previous year, to 2,890.

The main reason for the slow-down was a decline in finance and banking deals.

Law Society president Andrew Caplen said the results raise questions about how long the recovery will continue at its current rate.

‘Given the legal services sector’s wider economic links to the rest of the UK, a slow-down in the City Legal Index is a sobering reminder that the economy is not completely out of the woods yet,’ he said.

David Kekwick, director at Legal Monitor, said: ‘Lower growth in the financial sector over the next few years could force City law firms to identify new business opportunities. It is therefore very encouraging to see increased matter activity in the energy, utilities and natural resources and technology, media and telecoms sectors.’

According to Gazette research profit per equity partner (PEP) at top-40 firms grew by an average of more than 10% in 2013/14, compared with the previous year.