MHA Legal Benchmarking Report: How does your firm compare?
The latest annual Benchmarking Report from our national MHA Professional Practices team reveals that the sector needs to adapt to a ‘new normal’ to thrive as income and profitability falls.
Law firms need to focus on organic growth, improving the efficiency and billing processes as the sector faces the end of a three-year period of sustained growth.
Report key findings:
- 2017 heralds the end of a three-year run of income and profitability growth
- The gap between the smallest and largest practices continues to widen
- Average lock up levels jump up by 3 to 17 days for many firms
- Cultural change in staffing and ownership structures in firms
- Continuing fall in return on capital for firms across the board
The report draws on insight collected from legal practices across England, Scotland and Wales and highlights some of the pertinent issues for those in the legal sector. We would urge firms to consider the findings of the report in the context of their own practice.
Karen Hain, Head of the Professional Practices sector at MHA explains:
“2017 was a year of change for the legal sector and our research paints a challenging picture for many firms…After three years of growth, the drops in income and profitability could lead to criticism that firms took their collective eye off the ball…The UK legal sector needs to adapt to a ‘new normal’ putting a direct emphasis on having a better understanding of profitability and margins on work undertaken and improved financial controls. Efficiency needs to be a key theme for 2018 and beyond.”