Partly Cloudy

Partly Cloudy

max temp: 11°C

min temp: 5°C

ESTD 1874 Search

East Anglia: ‘Financial Benchmarking’ study reveals improved profitability for region’s law firms

10:52 21 January 2014

Carl Woodwards, senior manager at Lloyds Bank Commercial Banking in East Anglia.

Carl Woodwards, senior manager at Lloyds Bank Commercial Banking in East Anglia.

Archant

Law firms in East Anglia have seen an overall increase in profitability over the past year but may still need to refocus their approach to ensure long-term financial stability, according to a new report.

shares

Research by the Law Society’s law management section shows that fee income for legal firms increased by an average 4.1% in 2013, and that the average profit per equity partner rose by 3.6% to £121,731.

The annual Financial Benchmarking survey, now in its 14th year, also reveals that more practices in East Anglia have converted to a Limited Company or Limited Liability Partnership status while there has been a fall in equity partner capital.

In more than one fifth of the participatiing firms (21%), partners’ total drawings, including income tax, exceeded profits in both 2012 and 2013.

Other findings from the survey include stability in ratios of fee earners to support staff and a slight reduction in “lock up” work in progress and debtors combined.

The survey, which is sponsored by Lloyds Bank Commercial Banking and produced by Hazlewoods LLP, a medium-sized accountancy practice specialising in advising the legal profession, is widely recognised as an annual “health check” for the financial stability of small to medium sized law firms, providing an opportunity for firms to evaluate their performance against regional and national comparisons.

Hazlewoods’ director Andy Harris said the results showed that many firms were continuing to exercise tight control over spending where possible, even though staff costs were beginning to increase again.

Carl Woodwards, senior manager at Lloyds Bank Commercial Banking in East Anglia, said: “This year’s survey shows some positive trends, including growth in fee income and profits. It was pleasing to see some firms improving their working capital management, too.

“We are beginning to see some positive indicators that bode well for the economy in 2014, and solicitors are likely to get busier with a revival in house move transactions and rising levels of confidence among their business clients. However, solicitors in East Anglia will need to maintain financial discipline for sustained success.”

Nick Fluck, president of the Law Society, said: “It’s encouraging that law firms’ profits continue to modestly rise, but there’s no one-size-fits-all approach that will help firms to adapt to the tough conditions facing the sector today.

“The survey provides an invaluable insight into management structures which can help firms to formulate strategies and allocate resources to ensure financial stability.

“The law management section of the Law Society helps firms to share good practice and advice, playing a key role in helping law firms steer their way through challenging economic conditions.”

shares

0 comments

Alex Till of Menta.

Enterprise agency Menta has launched a new Digital Enterprise Engagement Programme (DEEP), offering newly formed local businesses and those who are self-employed access to free digital training courses.

Solar farm. Library image.

A proposed solar park in Wix has been tipped for approval by council planning officers.

The headquarters of Realise Futures in Ipswich.

Ipswich-based social enterprise Realise Futures has won a contract to provide supported employment services for adults with disabilities across a wide area of Essex.

Stage 5 of the Womens Tour passes through Onehouse on their way to Bury St Edmunds last year

Schoolchildren will also be involved in an evening of activities in Bury St Edmunds ahead of the start of a major women’s cycling event.

Paul Rous, of Bruisyard Hall, has launched a tech startup venture with Mark Pearson

A Suffolk entrepreneur has teamed up with a top technology investor, who made millions from a website he created with just £300, to help finance new ideas.

Cloud telecoms company X-on has launched Cuube, a new online communications services platform.

Cloud telecoms company X-on, based at the Framlingham Technology Centre, has launched Cuube, a new online communications services platform.

Jeremy Goulding, front, left, chief executive of Wheatley, is congratulated by Innovatioin Martlesham chair Ian Buxton on winning the first Innovationi Martlesham competition. Also pictured, from left, are Paul O'Brien of BT, Jane Bromley of Wheatley, Mike Ward of Wheatley and Mohamed Abdel-Maguid from University Campus Suffolk.

Software company Wheatley has been named winner of a new competition staged by Innovation Martlesham, the cluster of hi-tech companies based at BT’s Adastral Park research site, near Ipswich.

Total unemployment in the UK has reached a near seven year low, official figures showed today.
Photo: Philip Toscano/PA Wire

Unemployment in the UK has continued to fall and a record 31million people are in now work, according to the final labour market figures before the General Election.

The Nestle Purina plant in Sudbury.

KitKat, Nescafe and Shredded Wheat maker Nestlé said today that first quarter sales had been boosted by an earlier Easter, but with growth dented by currency changes after the Swiss central bank’s shock decision to lift a cap on the franc.

Most read

Most commented

Topic pages