Law firms are borrowing large amounts to fund expansion
18th August 2015
Law firms in the UK borrowing money from banks has increased by a staggering 28 per cent over the last five years to £7.35 billion as the firms aim to expand, retain key personnel and develop IT.
This news from finance provider LDF is great for the legal recruitment industry and lawyers alike and is a huge contrast from the beginning of the worldwide economic crisis when legal practices were asking partners to stop profit payments made to them.
Peter Alderson, managing director of LDF, told the Financial Times, “After some very difficult years during the recession, when lenders were very wary of their exposure to the legal profession, it’s encouraging to see law firms able to access the funding they need to invest and grow.”
According to LDF, although there has been a lending boost to law firms with record debt taken on to help expansion, short-term finance to help cover overdrafts has decreased by 23 per cent over the last three years to £1.8 billion.
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