Survey reveals most firms’ incomes increased in 2015, while hourly rates keep going up

The 2016 Law Society Law Management Section Financial Benchmarking Survey has shown that the income of firms has increased for a sixth consecutive year, with a median rise last year of 5.4%. The survey findings are generally positive, with net-profit-per-partner rising for the fifth consecutive year and now standing at £146,600 per partner.

Law Society President Jonathan Smithers said: “The Law Society welcomes the news of a continuing increase in income for the majority of firms surveyed, particularly after the challenges of the last decade. Our Future of Legal Services report brings together new and existing evidence to identify the key drivers for change over the next five years, together with the opportunities and potential threats. Having good management helps firms financially, which will be important for them to remain sustainable in the face of increased competition."

The results of the survey came out at a time when it was also revealed by the Centre for Policy Studies in its report that some partners charge as much as £1,100 an hour for their services. The report compared rates in 2003 to 2013, revealing the average hourly rate for partners in top commercial firms has risen from a maximum of £598 to £1,100 an hour.

Jim Diamond, a legal costs export and author of the report, said in the Guardian: “The balloon is about to burst. The top commercial law firms in the City of London are regarded as some of the best legal practices in the world, and are some of the most expensive providers of legal services. However they are also some of the least transparent, particularly in terms of pricing: while they do publish yearly statistics on the performance of their firm, from turnover to profit-per-partners, they do not publish information on the hourly rates charged to their clients.”