East Midlands law firms show signs of growth11 May 2012
New research from the Law Society has revealed that legal practices in the East Midlands are continuing to see an improvement in fortunes, with positive signs of growth.
The key findings in the Law Management Section (LMS) annual profitability survey, sponsored by Lloyds TSB Commercial, reveal the financial health of law firms across the UK.
The most recent survey findings suggest that practice fee income for legal firms has increased by one per cent in 2011, as law practices continue to recover from the impact of the recession. In 2010, firms in the region saw a marginal increase in practice fee income of 0.2 per cent, after a 6.5 per cent drop in 2009.
The survey of LMS member firms also revealed that average net profit per equity partner increased from £112,549 to £114,853 - a rise of two per cent.
Law Society President John Wotton said: "The LMS Financial Benchmarking Survey and the support that LMS provides to its members have had a key role to play in helping practices emerge from the recession through effective management.
"Now, LMS has an added purpose in light of changes to the legal services market. With more competition emerging and more opportunities for practices as a result of the changes under the Legal Services Act, a robust management system is critical for any law firm looking to attract external investment or remain competitive."
Now in its 12th year, the survey, which is produced in association with Hazlewoods LLP, a medium-sized, niche accountancy practice specialising in advising the legal profession, is widely regarded as the annual financial health check, particularly for the smaller end of the legal profession.
Colin Dutton, senior manager, specialist markets for Lloyds TSB Commercial in East Midlands, says:
"This year's survey shows admirable resilience on the part of solicitors. Fee income rose slightly against difficult economic conditions, while median net profit increased by two per cent - a modest rise, but nevertheless building on last year's improvement.
"Last year's respondents predicted that income growth might be around one per cent and they were spot on. This year, they are forecasting three per cent growth, so hopefully there are better times ahead. Respondents again commented positively on the support provided by their bank and this is pleasing. This is a key focus for Lloyds TSB Commercial and latest figures show that we have achieved a growth in lending to the sector of five per cent in the past year*."
In light of these results, it has never been more important for legal firms to work with a bank that truly understands their profession. Colin Dutton, Lloyds TSB Commercial continues:
"Our specialist relationship managers are trained by the Law Society as Lexcel Consultants and they have a sound understanding of the issues and challenges that legal practices are currently facing. They are determined to work with our solicitor customers to provide relevant support and guidance to help ensure that they are well equipped for success in 2012 and beyond."