Average fee-earner salaries in small to medium-sized law firms have risen by 10.6 per cent over the last year despite continuing pressure on practices to cut costs.
According to a survey conducted by accountants BDO Stoy Hayward, which canvassed 175 law firms of up to 25 equity partners, overall average profits increased by seven per cent.
But despite the reported rise in profitability and increase in pay for lawyers, the growth rate of earnings for support staff has slowed. Firms have been reducing the number of support staff, with the ratio of employees to fee-earners now 1.17:1.
The survey also revealed that small firms – those of two to four partners – were better at managing cash flow compared their medium-sized counterparts.
Lock up i.e work in progress plus debtor days, was 151 days for small firms compared to 187 days for medium-sized practices.