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UPDATE 1-Legg Mason's profit more than doubles as fund inflow increases

* Q1 adj earnings $0.86/share vs est of $0.58

* Operating expenses fall 10 pct to $562.05 mln

* $8.3 bln in net client cash flows in the quarter

(Adds details, compares with estimates, CEO comment)

May 1 (Reuters) - Asset manager Legg Mason Inc's quarterly profit more than doubled as operating expenses fell and investors poured more money into its funds.

Legg Mason said total assets under management rose 3.3 percent to $701.8 billion as of March 31 from the preceding quarter. It included $14 billion in market gains and $8.3 billion in net client cash flows.

"Over the past several quarters, we have made progress on both flows and asset mix, and sustaining that momentum in both retail and institutional channels remains a critical priority," Chief Executive Joseph Sullivan said in a statement.

Sullivan, who was put at the helm in February last year, has been trying to reverse a long record of net quarterly withdrawals by customers tied to past performance problems.

Legg Mason has witnessed net outflows in seven of the last ten quarters.

The Baltimore-based company said operating expenses fell about 10 percent to $562.05 million from a year earlier when it incurred real estate-related losses of $52.8 million.

Net income attributable to the company rose to $68.9 million, or 58 cents per share, in the fourth quarter ended March 31, from $29.2 million, or 23 cents per share, a year earlier.

On an adjusted basis, Legg Mason earned 86 cents per share.

Analysts on average had expected earnings of 58 cents per share, according to Thomson Reuters I/B/E/S.

Shares of Legg Mason closed at $46.89 on Wednesday on the New York Stock Exchange. They have risen about 9 percent so far this year.

(Reporting by Avik Das in Bangalore; Editing by Maju Samuel and Don Sebastian)

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