According to the Law Society of England and Wales Law Management Section Financial Benchmarking Survey, more than two thirds of solicitors reported year-on-year growth in fee income in 2020, while four in ten firms saw growth of 10 per cent or more.
The median practice fee income increased by 6.2 per cent – the largest increase for seven years, whilst median fee income per equity partner rocketed from £761,981 in 2020 to £825,331 in 2021.
After two years of decreases in equity partner profits, median net profit per equity partner was boosted by 39 per cent.
The Law Society said this was due to a combination of increased fee income, including a 15.2 per cent rise in residential conveyancing and a 12.1 per cent jump in employment, furlough grants and reductions in staff and overhead costs. The median spend on non-salary overheads per fee earner reduced by 2.2 per cent.
IT spending also increased as firms had staff working from home during the national lockdowns. In the long term firms are expected to see longer term financial benefits across other traditional overhead costs.
Paul Bennett, chair of the Law Society’s Law Management Section, added: “The pandemic posed huge challenges for law firms in terms of supporting clients through the most challenging period since the 1940s. Some law firms did exceptionally well, others struggled – to some extent this was likely dependent on which sector or client group they supported.
“Those firms with good habits around client service, good practice that engendered trust at a critical moment in history and the ability to offer the right expertise for the moment did well.”
PrinSolicitors have reported “solid” business performance for the first year of the pandemic, as 69% of firms reported year-on-year growth in fee income in 2020, with 40% seeing growth of more than 10%.According to the Law Society of England and Wales Law Management Section Financial Benchmarking Survey, many firms performed well financially due to consistent demand during the pandemic, lower costs and support from government which helped to avoid job losses.