Medium-sized law firms saw a year of solid growth in 2018, growing in both practice revenue and partner income.
The figures form part of the Law Society’s Law Management Section (LMS) Financial Benchmarking Survey 2019, which is based on questionnaires completed by 210 firms from across England and Wales.
Across all participating firms, the report showed a median rise in practice income of 4.2 per cent, indicating yet another strong year for the legal sector.
Likewise, the median fee income per equity partner increased by six per cent over the 12 months recorded, while the ratio of fee earners to partners remained steady.
The research, which is written and produced by Hazlewoods LLP and is now into its 19th year, suggests that challenges may be on the horizon, however.
Key issues, including Brexit and concerns over the short-term future, as well as compliance with the new Solicitors Regulation Authority (SRA) Accounts Rules and cybercrime, has dented confidence. It means solicitors are predicting growth in revenue of just 3.2 per cent in 2019.
Law firms are optimistic about upcoming changes in regulation, however, such as taking advantage of the ability to earn greater interest income and whether incorporation could benefit their business.
Commenting on the figures, Law Society of England and Wales president Christina Blacklaws, said: “The legal sector is an active and vibrant contributor to the UK economy. It contributes over £26 billion to the UK economy annually, with over £4 billion in net exports.
“Having good management helps firms financially, which will be important for them to remain sustainable as the market changes.”
To access the Financial Benchmarking Survey report 2019 in full, please click here.
With Mark Sharpley, executive committee member of the UK200 Legal Group, and fellow partners Jeremy Allison and Nicki Shipley at the helm of an experienced team of legal finance specialists, the Smailes Goldie Group is well positioned to offer tax and accounting advice to solicitors.
Whether you are a sole practitioner or a multi-partner firm, the Smailes Goldie group has the expertise and understanding of all financial matters relating to the legal profession, including: compliance services, Solicitors’ Accounts Rule audits, preparing annual accounts, tax advice for both firms and/or partners, and advising on LLP status.
For more information on any of the issues covered in this bulletin, please contact Mark Sharpley at email@example.com.