Strong M&A activity over the first half of the year helped the firms outperform the rest of the top 50, with average turnover across the group hitting £704.6m and average PEP breaking the million-pound mark to hit £1.067m.
The group is closely followed by the City-based £100m club, which includes the 12 City firms outside the magic circle with revenues of more than £100m. This group of firms, from Lovells down to Macfarlanes, saw turnover grow by an average of 16% and profits by 12.4% to £731,300.
Norton Rose chief executive Peter Martyr (pictured) said: “We had a strong performance based on good solid strategy. It is a culmination of things, this year we saw over 50% of people come from outside
Together with the magic circle this grouping have pushed the average turnover growth across the top 50 to 12.5%, leaving the mid-tier and national firms in the shade.
The results indicate both groups have been feeling the squeeze of the credit crunch, falling behind the rest of the top 50. Turnover for the mid-tier firms grew by an average of 12.4% with PEP increasing by just 5.3% — a marked difference from the 16.8% PEP growth at the magic circle.
Several of the mid-tier firms, including Olswang and Travers Smith, have seen PEP drop.
Freshfields Bruckhaus Deringer London head Tim Jones said: “The real test for mid-tier firms is what will happen now. How flexible and adaptable will they be? We are all fighting for our share of a smaller supply of work at the moment. Given the market conditions, it is more about flexibility than size.”
The national firms posted the lowest results for 2007-08 with turnover and profits seeing an average increase of 10.4% and 2.2% respectively, with average PEP now standing at £492,700.
Wragge & Co senior partner, Quentin Poole, said: “National firms will probably be OK through diversification and an ability to compete on price and costs base. It is a tough market and you will get firms that are winners and firms that are losers. The spotlight will be on the mid-tier firms that are caught in the middle.”
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