The uncomfortable truth behind top UK law firms’ growth figures

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Weak pound disguises some mediocre recent performances

The high end UK corporate legal market might not be doing as well as it seems, with the weakness of Sterling helping to disguise some leading firms’ notably mediocre recent performances.

A study by PwC has found that foreign exchange (FX) movements contributed around two thirds of overall fee income growth and almost half of profit growth in the UK’s global top ten firms.

In other words, elite UK law firms’ financial results are being propped up by earnings from their array of international offices which are then boosted when converted into pounds at the current favourable exchange rates.

Over the summer the magic circle quartet of Allen & Overy, Clifford Chance, Linklaters and Freshfields revealed revenue growth figures of, respectively, 16%, 11%, 10% and 0.3%, and profit per equity partner (PEP) growth of 26%, 12%, 8% and 5%. Other top ten firms, such as DLA Piper, Hogan Lovells, Herbert Smith Freehills, Norton Rose Fulbright, Ashurst and CMS also saw reasonable levels of turnover growth.

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But apply PwC’s findings to these figures and they look a good deal less impressive. According to the accountancy and consulting giant, the weak pound is contributing an average of £43.7 million of revenue and £16.2 million of profit (equating to an additional £33,000 PEP) to the top ten firms.

So what happens when Sterling recovers from its post-Brexit vote plunge? Well, PwC reckons that “the overall picture is one where profitability is under threat, competition is ramping up, and the impact of digitisation is potentially overwhelming”. Indeed, one of its partners, Kate Wolstenholme, believes that “fundamental action is needed”, explaining:

“It’s clear that the future success of global operations can’t be founded on FX benefits alone. Having taken this one-off income and profit boost, it will be interesting to see the real commercial impact of Brexit on law firms start to play out in the current financial year.”

She continued:

“Undoubtedly some firms will enjoy a rise in revenue from providing regulatory advice to clients — but economic uncertainty means workflow is unpredictable, and there is also a cost of scenario planning to ensure firms remain fit for purpose for a post-Brexit environment. Firms need to plan now if they are to thrive in years to come.”

It’s worth noting that PwC isn’t a purely impartial observer in all of this, boasting its own legal services division which it has ramped up lately to offer 25 training contracts — the same number as major law firms such as Travers Smith, Reed Smith, Squire Patton Boggs and Gowling WLG.

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The pound coins in your picture look very weak indeed.



Almost worthless in fact.


Ha ha, I’m better than you.

Not if you take them to a bank or Post Office, I’ll-educated swine!

Did you know that the Bank of England will still give face-value for pre-decimal coins and notes?

“No longer legal tender” does not mean “worthless”.

Ditto Irish punt- the Central Bank of Ireland will give the equivalent euro value for old Irish notes and coins in perpetuity.



For the amounts shown in the picture probably not worth the journey. So, worthless.



That looks like about £50. Definitely worth a journey to the post office.

Rupert; a US Firm Associate

You obviously practice in the Legal said sector…

Troll Hunter

The awkward moment when you call someone an “I’ll educated swine” whilst posting under the pseudonym “Ha ha, I’m better than you”.


Legna & Lived

Damn UK, you truly screwed your self up with Brexit. Come to Ireland .


Not Amused

I am really not sure why I need to point this out, but the act of the leave vote caused a drop in the pound.

That drop in the pound just resulted in huge growth in profit for law firms. We would not have that money but for voting to leave.

It is not immediately clear why we should have voted remain and thus been poorer. It is not immediately clear that Ireland is facing a bright economic future – you are still shackled to the Euro, your contribution to the EU is going up significantly until 2022 for no obvious reason and the EU commission is set to destroy your economy by raising your taxes or forcing companies like Apple to Guernsey.

Why not come join us?



It lines the pockets of a few partners, not most lawyers. I don’t like a sh*t what profit my firm makes. Many firms out there are giving w*nk pay rises that do not cover increased living costs. The drop in GBP has probably cost me at least £2-3,000 on increased holiday expenditure alone so far. If my pay was pegged to the Dollar I would be richer. If my pay was pegged to the Euro I would be richer. If my pay was pegged to most forms of Pesos I would be richer.


Not Amused

As well as resulting in huge profits across the service sector, which amounts to 80% of our economy, the vote to leave has also galvanised growth in British manufacturing.

It is right to be angry about the Euro making holidays unnecessarily expensive. That hurts our tourists and more importantly all of the southern European states. The fault lies with those who run the Euro. Please swear at them.


Not Amused

But of course tourism to the UK will also have been boosted.


So we all give up a little bit of our personal wealth to line the pockets of those working in tourism. I actually like that charitable notion but not in the context of a time when I’m trying to scrape together US$150k to get my St Kitts & Nevis citizenship.


If you actually believe that this is how economics works, then I’m baffled… If it were true that simply devaluing a currency meant that you achieved higher profits, then why wouldn’t every country in the world do it? It’s the most reductive line of thinking you could possibly take.

By your line of thinking, surely Zimbabwe must have the most profitable businesses in the world, since it’s currency has a habit of depreciating 99% overnight? That’d mean everything they export is suddenly worth billions of Zimbabwe dollars, meaning their economy is going gangbusters, right? Well that’s your line of thinking apparently. It’s the same with the current inflation figures and the BOE’s decision to raise interest rates; currency depreciation is masking a slowing or even an elimination of growth in almost all UK sectors, in an economy where the manufacturing sectors impact on economic health is negligible. However, the BOE is equally terrified of an artificially over inflating economy, which is not actually producing more goods or providing more valuable services in real terms.

Essentially, unless you can build an economy that is essentially self-sufficient in that it relies neither on trade in-flows nor out-flows in any significant way, you cannot reasonably sell the depreciation of the pound as a positive outcome for businesses, especially global ones. Forced currency depreciation or pegging exchange rates has a place in global economics, but it’s for countries with large trade surpluses, and I’m yet to run into any leave voters who are champing at the bit to work 16 hour days for $2.50 in Shenzhen style factories.

Not Amused

I think that you all need to reduce the hyperbole.

If you are reading this website because you hope to become a lawyer then the most important lesson to learn is professional courtesy and a respect for people who hold differing opinions to yourself.

In my view there is a difference between one, helpful, devaluation of a currency and Zimbabwe. It does not follow that currencies must always increase in value. We have had one devaluation. The net result of that has been wholly beneficial for the economy.

You can still oppose Brexit and accept that some good things might occur. But this event, parcelled up by PWC and sold to you by journalists is a positive impact of Brexit – and no amount of swearing or rudeness is going to change that.

Corbyn. Symphathiser

*Prices rise faster than incomes, forcing families into more borrowing and debt*

Not Amused: This is wholly good.

Thanks again for your insight, Brexit explainer.


Not Amused, this commenter was much politer than you. You may well be a senior QC or whatever it is you claim, but on the internet no one knows you are a dog so you don’t get to pull rank over people you assume are law students.

And there’s a difference between claiming that devaluing a currency is a useful tool when used correctly (obviously true, e.g. to encourage exports or tourism) and claiming that currency devaluation in itself creates of value (complete rubbish, as the commenter above points out). Your suggestion that the increased profits brought about by the weak pound show that the devaluation of the pound post-Brexit was a good thing promotes the latter theory.


I think probably a more important skill for a lawyer is not to espouse opinions that are manifestly wrong, which is precisely what the idea that an involuntary devaluation in the pound has somehow produced economic benefit for Britain is. It’s not that I could not accept a ‘differing view’ if it has merit or basis, but this simply does not.

The UK balance of trade has been negative since the late 90s, and hasn’t actually been consistently positive since ten years prior to that. This isn’t a trend that’s about to reverse because the pound has depreciated 10% in a year and a half, where aren’t about to see the great renaissance of the British manufacturing plant or mining in the north. What it is doing however is driving up the cost of imports, upon which Britain more heavily relies. These additional costs are being passed on to the consumer, and will continue to be passed on in perpetuity, because corporations are not in the business of absorbing losses they were not responsible for generating.

It has nothing to do with how it is being sold to the public by the media, and everything to do with quite simple logic, if that’s the easiest way to get the point across; simply because something is assigned a higher numerical value by a single individual, one day to the next, does not mean its real value has increased in anyone else’s eyes.

Take for example this cabbage I’m attempting to sell. Yesterday at the market it was worth 4 magic beans, but today I arrive at market and decide that because of factors both within and outside my control, it’s worth 5 magic beans instead. No one else at the market is going “damn, that cabbage just got a whole bean better overnight!”, they’re going, “damn, I wonder why magic beans are worth less today than they were yesterday”. The cabbage remains a cabbage, and probably is slightly worse than yesterday, what with it not being as fresh and so forth.

Regardless, that’s what’s happening here. The output of the British economy is not improving significantly, and (very) arguably it is declining. The fact that the monetary value assigned to that economic output has gone up is neither here nor there.


I don’t care about growth in the services sector. It doesn’t affect my position at my firm (which would be fine regardless of the Brexit situation).

I don’t like British manufacturing. It is cheaper and more efficient for most things to be manufactured elsewhere and not on this small island.

Corbyn. Symphathiser

Not Amused: “The fall in the value of the Pound is good, thanks to it’s relative value with countries who have currencies which aren’t the Pound!”
Anon: “It makes things more expensive for me when I go abroad, though. I think that’s bad.”
Not Amused: “Well, you should blame other countries for having currencies which aren’t the Pound.”

Thanks for your analysis, Brexit Explainer.


What a nasty piece of work she is. I wonder if she has even started to realise it and become self-conscious yet, or if she is still deluded.

I’ll accept her apology one day, perhaps. She would really need to apologise for the lies and hatred she had spread though, and of course for using her vote to severely screw us all over. What a horrible and selfish woman.

Corbyn. Symphathiser

If I were in your place I’d not put so much stock into NA being a woman as a put down. Their gender is irrelevant.


Replace all uses of she with he and replace woman with man and the post applies the same.

Corbyn. Symphathiser

I accept that – and trust me, I am hardly the first defender of NA’s mindless Brexiteering! – I just thought you post came off as a bit sexit. I don’t mean this as an insult, no-one’s perfect, least of all me, I just thought I’d voice my feeling there.


Fair, and I probably am slightly sexist. Admittedly, but in a potentially pro-female way. In this example, perhaps I was a bit heavy with the she’s and throwing in woman at the end. But in a pro-female way, because the point I was getting at was that for a woman to do these things makes it more evil. As, in my sexist view, woman are generally nicer and more caring people than men. Men tend to have more selfish traits and have less empathy. Is that sexist, or a fair observation of inherent differences in men and women? Perhaps that one is sexist in this day and age. I don’t know. Is it sexist to say that, on average, men are physically stronger than women? Is it sexist to say that Not Amused would have been at severe risk of being accused of witchcraft back in the day?


Would we be allowed?

I’d happily relocate to Dublin but unfortunately I only hold a British passport. It is a shame that it will probably hold little value in the future because of the racist, brexiteering mob hell-bent on insisting that no Europeans be allowed to enter our small-minded little nation. I may as well wipe my arse with my worthless passport after Brexit.


Frustrated Writer

It was 11pm by the time Jeremy got in. Tom was by then nearly out of his mind. He had paced the floor in their grubby two bedroom flat in north London most of the evening wondering what was going on. He knew that contacting Jeremy’s Roll on Friday girlfriend was not urgent, but was uptight as he wanted to get the wheels in motion so he could get out of Legal Cheek as soon as possible.

As Tom heard the key turn in the door he rushed into the hallway. Jeremy was still dressed smartly, having gone from work directly for his date. He was startled to see Tom stood in front of him as let himself in. “Blimey Conners, what are you playing at, you’ll give me a heart attack!” he scolded as put his hand to his chest.

“Sorry mate. Did she say I can get in touch?” Tom could not hide the anxiety in his voice.

Jeremy was bent over and began untying his shoe laces. “Yeah, the date went well thanks for asking”. He finished removing his shoes and stood up. He saw Tom’s face and knew he couldn’t mess him around any more. “Fine. Yes, you can message her. Chuck me your phone and I’ll give you her number. Her name is Charlotte by the way”.

Half an hour later Tom lay on his bed, wondering what to say. This was important. He had to phrase it just right. He knew that helping them with their litigation would be a useful negotiation point, as clearly he could not get in on his CV alone. He began to type.

‘Hi Charlie, It’s Tom, Jeremy’s mate.’ No, he thought. He had asked Jeremy not to mention his name, just where he worked, lest Roll on Friday leak details before he clinched the deal. Also, he had better be a little more formal. He began again. ‘Charlotte, it’s Jeremy’s friend. He said I could contact you about meeting for an interview. I know our publications are involved in a court case, and I have lots of things I can tell you that will help you win.’ He paused. Too direct? No. Faint hearts and all that. He pushed on. ‘I’m sure we can come to some sort of deal in our mutual interest. Let’s grab a coffee some time to discuss’. Tom read the message again, twice, and before he could think about it any more hit the send button. It was a done deal now. He just had to wait.

Despite telling himself not to, Tom checked and rechecked his messages. Charlotte had looked at her messages within the first couple of minutes, based on her check in time, but the two ticks remained resolutely grey. Five minutes later the situation was the same. Tom set a timer, promising himself he would not check again for another five minutes, but that lasted only for about three. This time the ticks were blue, but there was no reply. An hour passed before Tom finally gave up. He cursed himself for getting his hopes up and began dejectedly getting ready for bed, setting out his gym kit on his swivel chair. As he did so, he wondered what his parents would make of it if he became a power lifter. Anything would be better than admitting the truth, of working for a minor legal publication called Legal Cheek that was neither legal nor cheeky most days, he eventually concluded.

As he was brushing his teeth in the mould stained bathroom, he heard the ping of a message arriving. He dropped his toothbrush in the sink, and began scrabbling for his phone, which was in his jogging bottom trouser pocket. Finally digging it out, he saw the screen the news he wanted. It was her.

‘Hi, sorry for the delay in getting back to you. I’ll have a chat with my boss, but I’m sure he’ll be delighted. I’ll get back to you’. Tom had to restrain himself from punching the air. His departure was back on.



Ok, like the plot twist. We all assumed Charlotte was KK.

Well played, squire.



Not one of your better ones



Love your work


Gourmet Gary

There is a specific salty crust that accumulates on the skin of walrus as they sit in the crisp sun on an autumn morning. It is incredibly difficult to obtain this crust, but very brave children in a small community play a game called “Walrus Scrape” that involved them daringly approaching the animals to obtain the precious flakes. It is the unique structure of the flakes that is the reason I choose to use it in my “Rare Walrus” butter, alongside cream that originates from albino Jersey cows.

For the bread I obtain the flour from Tesco. I have experimented with some artisan flours sourced from all over the globe, but to be honest Tesco does the trick just fine. The same goes for the yeast. What matters is the warm water. I opt for tears instead. I call my tears the tears of joy and hope. With it being seasonal I opt joyful Christmas tears, obtained from happy relatives. It costs quite a bit of money, but I like to buy my family meaningful presents that will make a difference to their lives. Give them a hug and wipe away the tears subtly. Subtle is key, you are not really wiping them, but scraping them and siphoning them away. It is important to get as much of the tears as you can because you may only get 10 cries out of the whole family.

Anyhow, the bread ends up pretty special and has a lot of meaning behind it. The butter is fantastic. Essentially you may end up what seems like just buttered toast. But this is something else, trust me.



I want a slice Gary.


Hannibal Lecter

I want a slice of Gary.


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