Elite law firms are still defying the climate of economic uncertainty, according to the latest snapshot of the sector. PwC’s 31st Law Firm Survey reports today that fee income in the top 100 UK firms grew by an average of 9% in 2021/22. The top 10 achieved fee income increases of 10.2% - more than double the 4.5% they predicted.

When it came to profits, 65% of top 100 firms recorded growth year on year, the Big Four professional services firm reported.  

Practices performed strongly across the suite of services, from high levels of M&A activity through to litigation, employment, refinancing, restructuring and insolvency. This uplift has been accompanied by savings on property costs as hybrid working continues, although pressure on salary costs remains.

Recruitment remains a major obstacle for the year ahead: 88% of the top 100 are concerned that a shortage of talent will prevent them from meeting their ambitions in the next financial year. 

Meanwhile four out of five UK law firms said they are significantly concerned about cyber threats: the top 10 recorded this as their second biggest issue behind macroeconomic volatility, and one they are meeting with a 55% increase in security spend year on year. 

Kate Wolstenholme, leader of PwC UK’s Law Firms Advisory Group, said: 'Despite a very strong year, law firms now face some headwinds from continuing macroeconomic and geopolitical uncertainty, with high inflation, tightening of credit markets and the energy crisis creating a shift in business confidence.

'Firms may need to look beyond pricing to non-core cost reduction, improvements in operating model, and technology innovation to combat those challenges. But with some market players now focusing on expansion into adjacent service lines, successful firms will maintain a strategic growth mindset to avoid compromising mid- to long- term ambitions.'