LAW firms are managing to boost profits despite static fee income, according to a snap-shot survey.
Cutting staff costs, reducing overheads and an increase in the use of technology have been the back-bone of the improvements.
But the smaller firms, those with less than 10 partners, have continued to struggle and have failed to increase their profits, figures from accountants Grant Thornton reveal.
Andrew Otterburn, Grant Thornton's senior legal consultant, says the survey gives a feel for what is going on in the profession at the moment, without being entirely representative.
The figures are based on the responses of about 180 firms comprising more than 1,800 partners with a combined fee income of u450 million.
The survey reveals that larger firms, with more than 20 partners, have made the biggest strides with profits soaring from u78,000 to u100,000 per partner compared to last year. But income has barely gone up at all.
“Their improved results were largely attributable to better financial management, particularly in terms of their control of partner and staff costs, and reductions in overheads,” says Otterburn.
He also points to the increasing use of technology with the larger firms doubling the number of fee-earners who have computer workstations.
“That's a key part of unlocking productivity and performance,” he says.
Costs have also been held back by keeping pay rises in check. In most firms, salaries as a percentage of income have decreased.
In common with Law Society statistics, the figures reveal a large gap between profits of the top 25 per cent of firms and the bottom 25 per cent.