Legal Sector Survey Results: Cash flow
The results of which have been carefully analysed, compared and divided into four easy-to-read infographics. Each section gives the key statistics and the implications for the legal sector.
The results report on the following areas:
- Fees and Profitability including the impact on fee income, best and worst billing service lines and the change in profit levels.
- Staffing including recruitment, redundancies, and office vs remote working.
- Cash flow including lock up, work in progress (WIP) and debtors.
- Business strategy including key changes and what firms are prioritising in 2021.
We will release these individually over the course of four weeks.
This information can be used as a benchmark for your practice against others nationally, in addition to looking at the next steps you should be taking.
In May 2020, 44% of respondents had taken out a Government supported loan. As the scheme was extended, so too were the number of law firms who used it.
Of those firms who have such a loan, 88% have not yet used that cash reserve in their business. Many are holding the cash as a “comfort blanket”.
95% of firms said that they have sufficient cash reserves to pay the upcoming tax and deferred liabilities through to March 2021.
As the Government extends its support via various tax deferral schemes, this may not be such a critical timescale. However, it is worrying that 5% of firms do not have cash reserves and are instead considering HMRC Time to Pay arrangements or additional loans.View the full results
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A version of this blog appeared on the MHA website.