Top 50 LLP accounts: the post-pandemic bounce is on hold

The 2021-2022 year for law firms was characterised by the UK finally emerging from the shadow of the Covid pandemic. A gradual normalisation of social and economic activity was underway, with freedom of movement restored and corporate confidence returning.

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Published: 28 Apr 2023 Updated: 14 Nov 2023

There had been expectations of a significant bounce in demand for legal advice after the relative weakness of the pandemic years. Our analysis from the previous year had shown the top 50 law firms growing on average at a modest 4.1% and management teams were hoping for a post pandemic bounce to compensate and provide a platform for further prosperity. In this context, the 8.7% average revenue growth delivered by the top 50 law firms in our 2021-2022 year analysis* may be disappointing to legal management teams.

While it puts the UK legal market back on its pre-pandemic growth trajectory, it does not compensate for the weakness in the pandemic.  Having not experienced the hoped-for post pandemic bounce, law firms have then run into a period of economic uncertainty and an inflation crisis, which raised their input costs and squeezed margins. In the meantime, their clients were struggling with the economic challenge and, in some cases, higher borrowing costs, all of which has diminished their appetite for deals.

Specialist over generalist

The strongest performance was seen in litigation specialist Stewarts (up 43%), Bristol-based TLT (up 30%) and Taylor Wessing (up 25%). The latter’s success came in spite of a generally weaker environment for technology, media and communications. While there was little commonality in the firms that performed well, they tended to be specialists rather than generalists, with powerful reputations in specific areas.

Nevertheless, the top 10 firms delivered a creditable performance, perhaps indicating a flight to quality from corporates in a febrile economic environment. At the same time, Clifford Chance and Allen & Overy maintained their strong operating profit margins, the highest of any other firms.

Deal-making and IPO activity remained sluggish over the period, which created problems for law firms exposed to this area. The consultancy Bain & Co reported a 36% decline in global M&A volume in 2022.


What has proved to be particularly impressive is how firms have held on to their profit margins.  During the pandemic as indirect costs (and in some cases salary costs) were cut the average operating profit margin for the top 50 law firms rose above (the mythical) 30%.  As the world opened up again and indirect costs such as travel and entertaining returned many predicted that operating profit margin would fall.

However, the average operating profit margin for the top 50 law firms for the 2021-2022 year actually rose to 33.0%. This shows that law firm management teams retained a close control over costs, which is even more impressive when many would have based their costs base assumptions on higher levels of revenue.  Post this period the economic conditions worsened, inflation rose and interest rates were hiked.  It will be interesting to see whether the careful financial management exhibited by law firms continued into this more troubling period.

Annual Top 50 analysis 2021-22

In collaboration with, Evelyn Partners analysed the latest set of filed accounts for the top 50 UK law firms for the year to 31 March 22.