Good things come in small packages they say, and it seems that this theory does not just apply to gifts but to some Scottish law firms.
Just published last week, the results of our annual Financial Benchmarking survey, in association with Clydesdale Bank, make for interesting reading and in particular, revealed that some of Scotland’s smaller, boutique firms are doing extremely well.
To illustrate, this year’s research tells us that two to four-partner firms look to be in good financial health. They have enjoyed an 11 per cent rise in median profits since 2014 to £82,000 per partner, have good bank balances and low debt.
Sole practitioners who took part in the survey also saw an increase in profitability, from £41,000 to £50,000 since 2014. While median profits for sole practitioners in Glasgow were lower at £40,000, this figure still represents an improvement on the 2014 figure of £26,000.
On the flip side, the report highlighted some of the pressures facing slightly larger firms. Those in the five to nine-partner bracket, for example, saw just a 4 per cent increase in per-partner profits since 2014, at £96,000. And while the larger firms (ten+ partners) reported the highest profits per partner in real money terms, the 2017 figure represents a 23 per cent drop since 2014.
Nevertheless the positive messages about some smaller firms and indeed sole practitioners are food for thought for professionals with entrepreneurial aspirations currently running their own businesses or thinking of expansion – will those plans for growth bring the expected results?
The great results in our survey are partly down to commercial savvy and entrepreneurial thinking from legal firms, no matter what their size. In fact, the legal sector has a crucial role to play in the economy, contributing more than £1.2 billion per year and 20,000 high-quality jobs to the Scottish economy, and contributing massively to many other industries indirectly.
Scottish solicitors are trusted advisers to businesses and entrepreneurs across the world.
There has been enormous change in the legal sector since we first introduced our survey over two decades ago (formerly known as “Cost of Time”). Solicitors operate within an increasingly competitive marketplace, whether at a local, national or international level. The profession as a whole has adapted to meet changing client needs, and adopted new technologies to improve their business practice and client services.
The Law Society of Scotland plays a crucial role in supporting law firms. Our Financial Benchmarking survey allows us to chart trends and tailor our services more effectively, to support and guide Scottish solicitors. For example, the report reveals the continuation of a trend for greater reliance on paralegals in many businesses across Scotland.
From Wick to Stranraer, I have seen the importance of firms of solicitors on the high street and in our communities. Whether it’s finalising the purchase of your client’s first home, dealing with a challenging family issue, representing them in court, or being the guiding hand that helps them make a key business decision, our work means the world to communities across Scotland. Fiona J Robb is director of professional practice, Law Society of Scotland. A summary of the report can be found at: www.lawscot.org.uk/FinancialBenchmarking