Law firms in England and Wales enjoy rise in profits
9th February 2016
This year’s Law Society Law Management Section (LMS) Financial Benchmarking Survey has discovered that English and Welsh law firms have seen profits rise over the past year.
The survey, which checks the health of the sector every year and will be fully disclosed in March, also revealed that despite firms enjoying large profits, a number of firms could see a hit to their finances as a result of excess drawings.
Partners of firms and those working in lawyer jobs and positions will be delighted to hear that the average profit per equity partner increased for the fifth year in a row by 3 per cent to £143,000, whilst the average income from fees rose by more than 5 per cent.
Fee income increased across most legal sectors, but the survey also revealed that the breakeven point for a fee-earner also rose from £102,000 to £109,000, which was put down to a rise in non-salary overheads and other costs.
According to an article on the Law Society Gazette, the survey found that around a quarter of the 200 law firms that took part said they had taken out more money than they had made in profits.
This a concern according to Robert Banner, who is the LMS chair, “The firms that take part in the survey usually have a particular interest in high performance and management. If a quarter of these firms are over-drawing, then the proportion for the rest of the profession is likely to be higher.”
Despite this slight concern, legal practices are still in good shape and legal recruitment this year is set to continue at a similar rate to what it has been in recent years.
A spokesperson for Hazelwoods, who conducted the survey, added, “Most mainstream legal practices are in good shape financially, although clearly some areas such as personal injury and criminal continue to be tricky.”