In a landmark achievement for the legal sector, DLA Piper has become the first English law firm to break the £3 billion annual revenue barrier. The firm, which originated in Yorkshire before expanding globally, reported a 6.3% increase in earnings over the past year, reaching £3.01 billion according to independent researchers.
This impressive feat places DLA Piper well ahead of its “magic circle” rivals, with Clifford Chance coming in second with annual revenue of £2.3 billion, an 11.5% rise. The achievement is particularly noteworthy given DLA Piper’s relatively recent formation through mergers, including its 2005 combination with two US practices under the leadership of Sir Nigel Knowles. While this milestone is significant for UK-based firms, it’s worth noting that DLA Piper still trails behind its American counterparts. US giants like Kirkland & Ellis and Latham & Watkins reported annual earnings of $7.2 billion (£5.5 billion) and $5.7 billion (£4.3 billion) respectively last year.
The disparity between UK and US firms extends beyond total revenue. City firms are struggling to match the salaries offered by their US rivals in London, particularly for junior lawyers. The highest-paying firms for newly qualified solicitors in London are American, with Gibson Dunn & Crutcher and Paul, Weiss, Rifkind, Wharton & Garrison offering starting salaries of £180,000. Despite these challenges, UK firms are making efforts to remain competitive. Slaughter and May, a magic circle firm, recently announced an increase in starting salaries to £150,000, bringing it in line with its peers.
However, the gap in average revenue per lawyer remains significant, with 32 US law firms surpassing the £835,000 figure reported by the four magic circle firms that disclose this information. As the legal landscape continues to evolve, it remains to be seen how UK firms will adapt to compete with their US counterparts in terms of revenue and talent attraction. DLA Piper’s achievement marks a significant milestone for the British legal sector, but also highlights the ongoing challenges faced by UK firms in an increasingly globalised market.
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