Legal costs edge up but still less than in 2008

AVERAGE hourly charges across Scotland’s legal sector have edged higher for the first time in three years, but have not yet returned to levels recorded in 2008.

Preliminary findings from the annual “Cost of Time” survey produced on behalf of the Law Society of Scotland show that the average hourly expense rate in 2011 was £143.23, up from £137.52 the previous year. In 2008, the average hourly expense rate was £146.

Total turnover generated by the 260 firms that took part in the survey was £275 million, up from £249m in 2010. Court work accounted for £93m of fee income, of which £16m was from Legal Aid.

The figures will come as a glimmer of hope for the sector, which has endured tough times amid a downturn in both corporate work and residential property conveyancing.

Profits across the sector slumped by more than 40 per cent between 2008 and 2010. The survey predicts that expense rates are likely to show a small rise in the next few years. As was the case in 2010, slightly more than half of last year’s total fee income was earned by the largest firms of ten or more partners.

Expenditure also went up in 2011, to £194m against £176m previously.

The survey is produced independently for the society by Dr John Pollock of consulting actuaries Pollock & Galbraith in Stirling.