Solicitors' profits rise, survey reports

Profits of leading firms up 75% per partner in just four years

News, 15 March 2005

Scotland's top lawyers have seen their profits soar 75% in four years, according to the latest annual survey carried out by the Law Society of Scotland.

A general upturn in business confidence and the booming property market are believed to be behind the rises, which have come despite an increasingly competitive market for legal services.

Profits per equity partner in a typical firm with more than 10 partners hit £152,000 last year, up from £87,000 in 2000. However the survey authors, Andrew Otterburn and Dr John Pollock, warn that figures in that category are more volatile because they represent a relatively small sample of firms.

For firms of all sizes, the average profit per partner increased by a more modest 6% last year to £71,000, up from £52,000 in 2000. Firms in the 5-9 partner bracket actually reported an average decrease compared with 2003.

The survey indicates that the most profitable firms have a smaller number of profit-sharing partners per fee-earner, and a lower ratio of salary costs to fee income. Firms also have more difficulty making court work profitable unless they have the size and systems to be able to handle a large volume of legal aid work.

More than 230 firms took part in the survey, representing 20% of all Scots law practices. For a fuller account of the findings, see the feature article "A profitable exercise" now available on this site.