Linklaters has emerged as the law firm with the most expensive staff in the UK, according to research from Legal Week in conjunction with accountants Smith & Williamson.

The magic circle firm has the highest staff costs per employee among the UK top 50, based on an analysis of 2016-17 limited liability partnership (LLP) accounts filed on Companies House. The firm’s total staff costs of £705.1m, divided by its total lawyer and support staff headcount of 4,606, equates to an average cost per total employee of £153,100 – putting it narrowly ahead of magic circle peer Freshfields Bruckhaus Deringer on £141,400 in second place. Of the magic circle, Allen & Overy has the lowest staff costs per employee, according to the accounts, standing at £114,200 per employee. Slaughter and May is not included as it is not an LLP and therefore does not file accounts with Companies House.

At the opposite end of the spectrum, Shakespeare Martineau, Irwin Mitchell and Weightmans have emerged as the firms with the lowest lawyer and support staff costs per employee, ranging from £35,700 to £37,000. Given all of the data is taken directly from firms’ Companies House filings, it is possible that the findings could be influenced by inconsistencies in how firms classify their employees - for example, Linklaters and Clifford Chance’s total employee number includes some non-equity partner data. The full research by Smith & Williamson, which provides an in-depth analysis of law firm LLP accounts, looking at everything from debt levels to profit margins to partner capital, also highlights the firms spending the largest chunk of their revenue on staff salaries and related costs. Here, Linklaters and Freshfields once again feature within the top 10, but alongside a very different group of firms.

Insurance-focused firms feature prominently among the highest spenders as a proportion of revenue, with BLM (62%), Gateley (59%) and DAC Beachcroft (53%) leading the top 10 alongside DWF and Clyde &Co. In contrast, some of the firms with the highest staff costs per employee sit within the 10 firms with the lowest percentage of revenue spent on staff costs. Macfarlanes, for example, has the eighth highest costs per employee but, alongside CMS and Stephenson Harwood, spends the smallest percentage of its revenue on its staff than anyone other than Fieldfisher, at 32%. Similarly, Allen & Overy has the fourth highest costs per employee but spends only 35% of its revenue on staff costs and salaries, putting it within the 10 lowest spenders. Smith & Williamson head of professional practices Giles Murphy commented: "While the increase in revenue is pleasing to see, the percentage of this revenue that is being spent on staff costs has increased on average by just over 1% to 42.1%. At a time when firms are increasingly investing in technology and systems to improve efficiency, it seems incongruous that a larger proportion of their income is being spent on staff costs."

• This is the first in a series of articles analysing the 2016-17 LLP accounts of the UK top 50, in association with Smith & Williamson. Other subjects under the microscope will include profit, debt and how the magic circle compares to the rest of the market.