Midlands law firms are closing the gap on big City rivals with fees per partner up 5.9% from last year.
Average fees per partner in City firms dipped for the second year in a row to £1.5 million, while regional firms are closing the gap with an average of £955,000.
Audit, tax, advisory and consulting firm Crowe has released the results of its Law Firm Benchmarking report – created in collaboration with The Institute of Legal Finance & Management – offering key insights into the evolving landscape of the legal industry in 2024.
Key statistics include:
- 89% of firms are expecting increased revenues in the current financial year
- 39% of law firms increased their revenue over and above the rate of inflation in 2024
- 66% of firms expect people to be back in the office for more than 50% of the time
- Fees per partner in City firms dipped for the second year in a row to £1.5million. Regional firms are closing the gap with their average being £955,000, a 5.9% increase from last year
- Headcount increased for 71% of firms, with the average cost per head increasing to just under £80,000 in the City
- Cybercrime and fraud resilience are considered to be a high priority for 97% of firms, despite only 32% of firms providing monthly or quarterly cybersecurity training
Crowe’s report reveals that the outlook for the legal sector has remained more positive than expected throughout 2024 despite challenges, with the vast majority (89%) of firms expecting to increase their revenue this financial year.
Despite inflation peaking at 11% in 2024, nearly 40% of firms have increased their revenues over the rate of inflation, with half of City firms achieving revenue growth higher than the inflation rate.
The survey also found a shift in workplace dynamics. Firms are looking to change the balance between time spent at home and in the office, with 66% expecting people in the office more than 50% of the time. The findings suggest that office attendance has largely been driven by regional firms, 79% of whom expect three or more days a week in office, compared to 50% of City firms.
Elsewhere, cybercrime and fraud resilience remain a top priority or business critical for 97% of firms in the coming years, with phishing scams the main concern for 98% of those surveyed. However, only 32% of firms are providing their staff with monthly or quarterly training on cyber security.
Sue Daye, Professional Practices Partner for Crowe in Cheltenham and Oldbury, said: “With firms adapting to various economic headwinds and changes this year – from high inflation and the increased use of AI and new technologies to the arrival of a new government – it’s positive to see that the legal sector has performed well and remains optimistic.
“The challenge for firms will be controlling expenditure and increasing profits per partner whilst effectively managing clients and the wellbeing of staff, as well as increasing resilience in the face of surging concerns about cybercrime.
With work patterns also changing, firms will need to strike the right balance between home working and time spent in office to ensure a thriving and productive workplace whilst also enhancing team wellbeing.”
Tim Kidd, Chief Executive, Institute of Legal Finance & Management (ILFM) said: “We are happy to have partnered with Crowe UK for the third year on the annual Law Firm Benchmarking report. Collaborating on this has been a significant step toward fostering transparency and driving excellence in the legal profession.
“The bespoke reports that each of our participating member firms receive provides invaluable insights that will empower firms to measure their performance against industry standards, identify areas for improvement, and enhance the quality of legal services provided to clients.”
