Member Article

North East and Cumbrian law firms see profit rises

Law firms across the North East and Cumbria experienced increased profitability in 2013 as average fee income increased by an average 4.1% across the two regions.

The Law Management Section’s (LMS) annual Financial Benchmarking survey suggested that average profit per equity partner rose by 3.6% to £121k.

While more practices in the North East and Cumbria have converted to a limited company or LLP, there was a fall in equity partner capital, with some firms overdrawing profits.

Graham Lowes, senior manager at Lloyds Bank Commercial Banking in the North East and Cumbria, said: “This year’s survey shows some positive trends, including growth in fee income and profits. It was pleasing to see some firms improving their working capital management, too.

“We are beginning to see some positive indicators that bode well for the economy in 2014, and solicitors are likely to get busier with a revival in house move transactions and rising levels of confidence among their business clients. However, solicitors in the North East and Cumbria will need to maintain financial discipline for sustained success.”

Nick Fluck, president of the Law Society, said: “It’s encouraging that law firms’ profits continue to modestly rise, but there’s no one-size-fits-all approach that will help firms to adapt to the tough conditions facing the sector today.

“The LMS survey provides an invaluable insight into management structures which can help firms to formulate strategies and allocate resources to ensure financial stability.

“The Law Management Section of the Law Society helps firms to share good practice and advice, playing a key role in helping law firms steer their way through challenging economic conditions.”

This was posted in Bdaily's Members' News section by Tom Keighley .