Partner profits rise in the City as regional firms face tougher times
updated on 12 November 2025
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Partner profits at City law firms rose by 12.12% in 2025, while regional firms faced tougher conditions, with profits declining by 10.82%, according to a new report from audit, tax, advisory and consulting firm Crowe.
Crowe’s Law Firm Benchmarking report, which was created in collaboration with The Institute of Legal Finance & Management, highlighted that City firms maintained tight control over cost bases to offset rising cost pressures. Meanwhile, the report suggested that fee growth at regional firms wasn’t great enough to compensate for inflationary pressures and increased infrastructure investment.
City firms saw an 8.2% increase in fees per partner, with average partner fees hitting £1.3 million. The report suggested that this trend was driven by City law firms’ involvement in complex, high margin work, such as corporate transactions, regulatory advisory and international disputes. Meanwhile, partners fees also rose by 6% at regional firms to an average of £1.1 million.
When analysing revenue growth, regional law firms saw a bigger increase of 12.21% compared to 10.19% for City law firms. Law firms nationwide recorded revenue growth of 10.84%.
The report also found that firms are improving how quickly they turn work into cash. Both regional and City firms reduced their ‘lock-up’ periods – the time fees remain tied up before payment – by two days and 13 days, respectively. Data showed that, while City firms issue bills faster, regional firms are better at collecting payments, likely due to tighter cash flow needs.
The survey also explored law firms’ strategic priorities, revealing that:
- cybersecurity remains a key focus, with 22% of firms reporting a cyber incident in the past year and 81% now having a dedicated cyber specialist in place;
- over 80% of firms have a net zero plan or expect to implement one soon, up from 62% last year;
- average headcount has increased by 3.73%, signalling continued investment in people; and
- while private equity interest remains strong, significant investment is yet to fully materialise.
Head of professional practices at Crowe, Nicky Owen, commented: “The legal sector continues to show strength and resilience, with solid financial foundations and optimism for achieving future growth targets.
“Concerns around cybercrime continue to rank highly – and rightly so, with one in five firms experiencing a cyber incident in the past 12 months alone. Investing in shoring up defences against cyber attacks is a priority, alongside carefully managed adoption of new technologies and artificial intelligence tools.”
