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  • Eleventh edition of the NatWest Legal Report finds growth in fee income and profitability.
  • South-West & Wales is the most profitable region while private client and residential conveyancing teams were identified as the strongest performers.
  • Over a quarter of respondents see the attraction and retention of talent as a key challenge.

 

NatWest has today published their eleventh legal report analysing the financial performance of law firms across the UK following a survey of 110 participants.

Optimism in the legal sector remains high, with 84% of firms feeling positive about the future, referencing strong growth in both fee income and profitability. This is a slight decrease from 90% in 2024.

The report focuses on firms that operate at the commercial and mid-market level across England, Scotland and Wales, with turnover ranging from £1 million to £200 million, and an average turnover of £17 million.

Firms surveyed experienced growth in fee income and profits per equity partner (PEP), a common measure for law firm profitability, over the past year. Overall, median PEP increased by 23%, to £340,000, in 2025. Small firms enjoyed an increase of 8%, to £204,000, while large firms saw a significant increase of 23%, to £372,000.

A regional breakdown shows that firms in the South-West & Wales reported the highest median PEP of £407,000, for 2025, followed by London & the South-East (£297,000) and the North & Scotland (£283,000).

The survey also asked firms for expectations of fee growth in 2026, with the data showing that 89% of firms expect their fee income to further increase.

 

David Weaver, Head of Professional and Business Services, NatWest, said:

“It’s encouraging that the legal sector has exhibited such remarkable resilience with the vast majority of firms having a strong sense of optimism about the future. Many of the firms we surveyed demonstrated strong growth in both fee income and profitability despite recent challenges, most notably margin pressures.”

“We find that the strongest performing firms within the sector tend to focus on long-term vision, have a Future Fit mindset and prioritise some of the key areas that are commented upon within this report such as Talent, Technology and Sustainability in its widest sense.” 

 

The report also breaks down fee performance by teams and found the strongest performers to be private client and residential property teams. 34% of respondents reported private client teams as the most buoyant area in 2025, followed by residential property (14%) and real estate (13%). Firms were also asked to identify which areas of their business they felt were underperforming. 23% cited litigation, 22% pointed to family law, and 21% highlighted commercial and transactional work as the weakest performing teams in the first quarter of the 2026 financial year.

 

Andrew Allen, author of the report and Partner at PKF Francis Clark, said:

“This is the eleventh legal report prepared by NatWest and we are delighted to report 110 participants in this year’s survey with a good spread of firms both by size but also geographical location enabling us to give an insight into the legal sector in 2025. The combined revenue of firms in the survey exceeded £1.8bn and the average revenue of a participant firm was £17m."

“Half of survey participants are actively engaged in using AI in their business, although most firms are using this for administrative activity and general matter management rather than delivering legal advice. In the NatWest 2023 survey only 2% of firms reported using AI in their business.”

NatWest Legal Report 2025

Download the 2025 Legal Report (PDF,  16.8 MB)

Download

For further information contact

Jennifer Russell - Media Relations Consultant, NatWest Group.

Jennifer.russell@natwest.com | 07715522606

Notes to editors 

Data comparisons in this survey
There are two levels of comparison in this survey. In many areas we are comparing financial results of the firms (110 firms) who have taken part in the 2025 survey with those same firms’ financial results in 2024; giving a year-on-year comparison from the same cohort of firms.

Keeping in mind of course that many firms in the legal sector operate with a 31 March or 30 April year end, this means that a good number of the financial comparisons in this survey are right up to date – comparing March / April 2025 year-end results for firms with those from March / April 2024.

In some areas of the survey, we are also comparing what has been reported by the firms that participated in the 2025 survey with those views and results from the firms that took part in the 2024 survey. So, in those comparisons we are looking at a slightly different cohort of firms. When we are undertaking such comparisons in this survey this should be clear by our reference to “the 2024 NatWest survey” or similar.

 

About NatWest

NatWest serves customers in England and Wales, supporting them with their personal, private, and business banking needs. NatWest helps customers at all stages in their lives, from opening student accounts, to buying their first home, setting up a business, and saving for retirement.

Alongside a wide range of banking services, NatWest offers businesses specialist sector knowledge in areas such as manufacturing and technology, as well as access to specialist entrepreneurial support.

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