The º£½ÇÊÓƵ's legal sector continues to thrive despite challenging market conditions, a new study has shown - although concerns about cyber attacks could hinder firms' strategic goals.
The PwC Law Firm Survey 2025 reveals that the top 10 law firms in the º£½ÇÊÓƵ have reported a fee income growth of 8.1 per cent, compared to 5.2 per cent across all international regions. However, the report indicates that the average rate of growth within each band has decelerated compared to 2024.
The top 10 refers to the ten largest º£½ÇÊÓƵ-based law firms ranked by global revenue, as reported by .
The top 10 º£½ÇÊÓƵ law firms saw their profit per equity partner (PEP) increase by 5.4 per cent to £1.8m, maintaining their sector lead. The PEP at firms in the top 11-25 rose over 4 per cent to £1.04m, and those in the top 51-100 firms saw the most significant increase at 5.5 per cent to £595m.
However, firms in the top 26-50 experienced a decrease of 1.6 per cent to £635m.
As highlighted by PwC, firms in the top 51-100 led the way in growth over the past year, reporting an 11 per cent increase in fee income and a 1.1 percentage point rise in net profit margin to 24.6 per cent.
These profitability trends further highlight the differences between these groups.
The Top 10 firms, as highlighted by the report, successfully converted fee income gains into profit growth, with net profit margin improving by 0.6 percentage points to 37.4 per cent.
Meanwhile, the Top 11–25 firms have struggled to maintain momentum, with their average net profit margin declining by 0.3 percentage points to 25 per cent.
The financial burden of competing with larger practices and the expenses linked to international expansion are evidently impacting profitability.
The legal sector has been actively embracing new technology, particularly Gen AI, which is poised to drive a fundamental shift from conventional hourly billing as client dissatisfaction continues to mount.
Throughout the past year, the report observed the average hourly rate at a Top 10 firm was £496, followed by £336 at a Top 11-25 firm, £289 at a Top 26-50 firm and £262 at a Top 51-100 firm.
Nevertheless, looking forward, the report stated, "there is likely to be a pronounced shift away from traditional hourly billing towards fixed-fee arrangements".
Roughly two-thirds of the Top 100 law firms expect that AI adoption will create financial difficulties, including downward fee pressure.
Lucy Robson, tax leader of law firm advisory group at PwC º£½ÇÊÓƵ, said: "The º£½ÇÊÓƵ legal market continues to display resilience, with many firms achieving growth in fee income and net profit. However, the sector faces challenges such as slowing growth rates and pricing constraints."
While this push towards AI and worries surrounding pricing persist, it was the threat of cyber attacks that was repeatedly highlighted as a concern across every section of the Top 100.
More than 90 per cent of legal practices indicated they are either extremely or somewhat worried that cyber threats might hinder their capacity to meet strategic goals within the coming one to three years.
Mark Anderson, global business services leader at PwC º£½ÇÊÓƵ, said: "This year's survey paints a picture of a global legal market navigating a complex landscape marked by regional disparities, in an unprecedented period of cyber-attacks and macroeconomic uncertainty."
