Lancashire law firms are benefiting from improved economic conditions and legal mergers continue to rise, according to a study of the region’s legal market.
The latest report from MHA, the UK-wide group of accountancy and business advisory firms, indicates a more positive outlook across most firm sizes, helping to ease the financial pressures experienced in recent years.
The annual review of legal firms, conducted in partnership with Blackpool-based accountancy firm Moore and Smalley, one of nine MHA members, highlights growing demand for legal services in the commercial and residential property sectors, with confidence also returning to many practices active in corporate transactions.
It highlights significant growth in total fee income generated by practices with more than 11 partners, extraordinary growth in profit per equity partner in 25+ partner practices as a result of mergers, that ‘Lock-up days’, the time it takes to get paid for billable work, have reduced for all sizes of practice, other than sole practitioners and that expenditure on staffing remained consistent, but is expected to increase this year
Karen Hain, (pictured) from Moore and Smalley, and head of the professional practices group at MHA, said: “Large practices have succeeded in making true economy of scale savings in overheads and running expenses, while still increasing top line fee income.
“We have also seen a reduction in equity partner numbers, so that these fewer individuals are really benefitting from higher rewards derived from personal capital invested in the business.
“We are seeing far more movement this year in smaller practice mergers, most of which is driven by succession planning issues.”