Law firms in the north are the most efficient in the country, according to the latest Financial Benchmarking Report from NatWest and RBS – the largest free report of its kind.
The research looks at the performance of law firms operating in the SME space across the UK with revenues below £35 million.
It was a strong year for law firms in the north
Lisa Ford, head of professionals team north at NatWest/RBS, said: “It’s great to see that legal firms in the north continue to outperform many other regions in respect of fees per fee earner at £155,000.
“However, legislation changes associated with litigation work has applied a downward pressure on profit levels, and as a percentage of fees profits were 20 per cent in 2014 and a reduction of four per cent on 2013.”
She added: “It was a strong year for law firms in the north, which posted a seven per cent improvement in revenue levels in 2014 supporting a median profit improvement of 11 per cent.
“But this impressive performance did not evidence itself through profit per equity partner, which at a median level only increased by £5,000 to £112,000.”
Lock-up, which refers to levels of unbilled work, was recorded at 128 days – a significant increase of 20 days on 2013. This is in line with a traditionally higher demand for borrowings from legal firms in the north in support of litigation associated lock-up.
Steve Arundale, head of professional services at NatWest and RBS, added: “The report has grown significantly since we launched it, and has been a valuable tool for us and our customers in tracking how they are performing against their peers in a relatively unexplored area of the market.”
More than 330 firms across the UK took part in this year’s research, produced with Robert Mowbray of legal consultancy Taylor Mowbray, showing healthy improvement in both revenue and profit levels.
The report is available at www.nw-businesssense.com/financial-benchmarking-law.html.