2019 Legal Benchmarking Report
Our 2019 Legal Benchmarking Report reveals how the changing legal landscape and a fall in fee income has had a positive impact on many practices, prompting them to scrutinise their profitability drivers and reduce expenditure, resulting in improved profit per equity partner figures.
- Growth in start-ups and niche ‘boutique’ practices
- Fee income trends are a mixed bag – only two categories achieve a significant rise
- All practice sizes – except one – report a marked improvement in Profit per Equity Partner (PEP)
- Significant decrease in partner and practice funding
- Lock up levels remain static, although smaller partner firms struggle to gain control
- Firms under pressure to be more agile, increase investment in IT and offer flexible working patterns
Karen Hain, head of the Professional Practices sector at MHA, commented:
“Our latest report demonstrates the importance of prioritising profits and margins over fee income growth. Firms that improve their efficiency will in turn benefit from greater profitability and financial stability, giving them a better chance of survival in this highly-competitive and challenging market. Practices need to ensure they can react quickly to new work prospects as they arise, and this involves staff being ‘nimble’ and ready for challenges.
Firms should be making changes now for a different future work environment and this starts by scrutinising their staffing mix, IT, management information and case management systems. They must maximise client relationships – understanding which service lines and clients are the most and least profitable – and have strategies in place to increase fees. Some of the most profitable practices focus on limited services and add value to their work as specialists.
Less paper and more flexible working patterns should be in every businesses DNA; successful businesses automate and gain efficiencies from maximising the use of technology and the latest software. They also sell the value of what they’re providing rather than base their fee on what it costs, avoiding an undersell situation, and pay attention to their lock up situation.”
Download Now: 2019 Legal Benchmarking Report
If you would like to discuss any of the issues raised in the report in more detail or if you would like to speak with a member of our team, please contact Hannah Farmboroughor call on 0207 429 4147 to be put in contact with a member of our Professional Practices team.