The UK legal industry posted its strongest September on record this year, beating the previous record set in 2019, according to the latest Office of National Statistics data.

The legal sector generated revenues of £3.1bn in September, 2% higher than the same period a year ago, and 23% higher than August. Legal revenues outpace the overall services sector in September, which grew by 18% compared to August.

Louis Young, managing director at litigation funder Augusta, said: “It is very encouraging to see the resilient legal sector holding up so well against the uncertainty of Covid-19. While there is still a great deal of uncertainty going into the autumn as a result of the second lockdown, and many firms are still recovering from the impact of the first part of the year, the sector has shown a true depth in management to perform the way it has.”

Young added that he expects it to be a difficult fourth quarter for the industry, though law firms navigated the spring lockdown without too much of a dent on earnings. April revenue fell only 4.7% from March, compared to a 20% decline for the economy as a whole, ONS data showed. 

The bounce back in revenues during June and July had put some firms on course for their best financial year ever, said Rob Millard, director of Cambridge Strategy Group.

The Financial Times last month reported that several large UK firms have started repaying government furlough money because they had been busier than expected. Those included Norton Rose Fulbright, Osborne Clarke and Herbert Smith Freehills, which have also rolled back cost-saving measures imposed at the start of the pandemic.

Back in September, Hogan Lovells also reversed salary cuts for its US associates and reinstated deferred salary reviews for UK and Asia Pacific associates in response to a ‘solid’ summer performance. 

DWF this month reported a 14% increase in revenue during the first half of the year, adding that the firm is ‘cautiously optimistic’ about the next six months. The rebound in activity came after a dip in fortunes at the onset of the Covid-19 pandemic that resulted in the departure of CEO Andrew Leaitherland in May.