Cornish law firms are showing signs of recovery, according to a new survey published by the Law Society.
The findings show that legal practices in Devon and Cornwall are seeing an average increase of 0.2% practice fee income in 2010, following a reduction of 6.5% in the previous year.
The key findings in the Law Society Law Management Section’s annual profitability survey, sponsored by Lloyds TSB Commercial, reveal the financial health of law firms.
Firms are also beginning to recruit again. The survey reveals that the 200 participating firms reported total recruitment costs of £2,141,614 to recruit 1,022 people, while the average spend on non-salary overheads per fee earner dropped to £35,551, down from £41,959 in 2009.
Law Society president Linda Lee said: “The Law Society annual LMS Financial Benchmarking Survey is a key tool for firms looking to assess the way they run themselves as a business.
“For the profession as a whole, it is a useful indicator of the financial health of the sector. Although there are signs of recovery, process is slow and firms will be looking at how they can continue to grow as we emerge from the recession.”
Other key findings included:
- Median fee income per equity partner of £455,650 (2009: £469,666).
- Median equity partner capital increased by 7% to £135,191.
- The median cost of a fee earner was £40,240 compared to £43,938 in 2009, a fall of 8.4%.
- The ratio of partners to fee earners remains static – a median of 1 to 4.
The survey helps firms plan for future financial objectives; big profit increases require detailed understanding of financial performance. Benchmarking against other firms helps firms face up to the challenges of the new legal services environment, and consider the benefits of external investment.