Of the 10 firms surveyed that would provide figures, Deacons has recorded the strongest revenue growth at 13.6 per cent, and says it has seen Australia’s fastest revenue growth over the past three financial years.

But revenue growth was a mirror image of total revenue, with top earners recording the lowest growth.

The highest revenue figure overall was consistent leader Mallesons Stephen Jaques. The firm has come closest to breaking the $500 million revenue mark, although it would not give an exact figure, only indicating it was between $495 million and $500 million.

Next was Freehills, which reached a pre-audit figure of $482 million. The firm increased revenue by more than 11 per cent in 2005—06, however, growth last financial year was down to 3.66 per cent.

Corrs Chambers Westgarth was also a strong performer, with revenue rising 11.5 per cent from $208 million, to a pre-audit figure of $232 million in 2006—07, compared to a 6.7 per cent increase in the previous financial year.

Blake Dawson Waldron recorded the third-highest growth of respondents, with a 10.5 per cent rise from $305 million in 2005—06, to a pre-audit level of $337 million in 2006—07.

The firm was the only one out of the 10 firms that has given any indication of changes in profit. On average, the firm said profits had jumped by 25 per cent firm-wide, and revenue was up 20 per cent for “strategic clients” and 29 per cent for their top-200 clients.

But it was only just ahead of Clayton Utz, with pre-audit revenue up by 10.23 per cent on the previous year, beating their 2005—06 performance of 8.3 per cent growth.

Clayton Utz broke the $400 million revenue mark, rising from $391 million in 2005—06 to $431 million last financial year, just behind Minter Ellison at $434 million.

Clayton Utz national head of banking and finance, Grant Fuzi, said this revenue was an “exceptional figure”.

“The $430 million mark; that was what we were looking at as a real stretch target for a successful year. To get over that and to go above the 10 per cent growth [mark] … is a result we are very proud of and very happy with,” he said.

For his firm, and others, one of the drivers of the growth was the “explosion of the private equity market”, which contributed to good results for a number of practice areas, including M&A, and banking and finance.

But while most firms were keen to publicise some good revenue figures this year, many say it is just one measure of success, and top-tier status.

“Traditionally, [revenue] is how you’d look at it. But it is increasingly becoming less so,” said Don Boyd, managing partner of Deacons.

Literal size and geographic reach was also a factor when measuring which firms should be included in the top-tier. “You do need a certain breadth and depth to give clients the confidence that you have the specialties and the resources to handle the major transactions,” he said.

But several smaller firms compete well for top-tier work in a range of practice areas, and he nominated Gilbert + Tobin, Baker & McKenzie, and Henry Davis York as examples.

“Even the biggest firms don’t necessarily have the range of specialties that clients are looking for. So I think it’s increasingly easy to be competitive without necessarily being massively big. I think at some point there is a diseconomy of scale,” said Boyd.

“I don’t think size in itself determines who’s top-tier,” says Freehills CEO, Gavin Bell. “I think the way the Australian market has developed it’s turned out that to be in the top-tier you need to be of a certain size, but it doesn’t necessarily mean you have to be the biggest either, in terms of people or revenue.”

Many firms counted quality of work as the first criterion for defining the performance of a law firm and its top-tier status, as well as working on the most important deals for Australia’s largest corporate clients.

“We don’t have an obsession of ‘we want the biggest revenue figure, and therefore we’ll do all sorts of work purely to grow the revenue line’,” said Fuzi at Clayton Utz. “Our focus has been on positioning ourselves to the best work, for the best clients in the market.” Good revenue and profit figures were a result of that focus.

“First and foremost it’s the quality of the people [a firm has], and that depends on how you recruit graduates, how you train your people, and make sure they get experience when they’re here — everything flows from that,” said Bell.