COST OF TIME SURVEY 2011

 Cost of Time Survey 2011

• The average hourly expense rate in the 2011 Survey came out at £143.23 compared with £137.52 in 2010.  This is the first time in 3 years that the hourly rate has increased although it is still not at the 2008 level of £146.
• Almost 260 firms took part - the highest number for some years.
• 41% of firms taking part were sole practitioners (slightly lower than the average across Scotland which is 50%); 48% were firms of 2 to 4 profit sharing partners (compared with the national average of 39%); 6% of the firms between 5 and 9 partners (compared with 7% nationally); and 4% were firms of 10 or more partners which is the same as the national figure. 
• Total turnover of participating firms was £275m compared with £249m in 2010.  £93m of the total fee income was in respect of Court work of which £16m was from Legal Aid.
• As in 2010 slightly over 50% of the total fee income was earned by the largest firms of 10 or more partners.
• Total expenditure of participating firms in 2011 was £194m of which £113m was in respect of staff salaries, staff pensions etc.  The comparable figures in 2010 were £176m and £107m.
• The zero income expense rate (the rate needed to cover office overheads including staff salaries without giving the profit sharing partners any remuneration for themselves) was £70.95 per hour compared with £68.61 in 2010.
• Pay growth within firms has been flat in the last couple of years but looking ahead the actuary forecast that expense rates are likely to show a small rise in the next few years.

The 2011 survey has not yet been published. The 2010 survey can be accessed from our website.

The Society conducts the annual Cost of Time and Benchmarks Survey, which now contains significantly more information than just the cost of time and is carried out independently by Dr. John Pollock of Pollock & Galbraith, Consulting Actuaries in Stirling. As the Society withdrew the Table of Fees in 2005 no recommended fees follow the survey although the historical information it provides about the cost of running the average practice remains highly relevant. For firms that take part the benefits include:

1. CPD

   3 hours Management CPD will be credited to the partner who completes the form.
   
   

2. An individual report

   Each firm taking part will receive a specific report in an easy to read A4 style with explanatory notes. Dr. Pollock also offers the facility for firms to request alternative calculations on alternative assumptions if these would be more appropriate for their firm. With the withdrawal of the Society's recommended Table of Fees the provision of this information will become an even more important management tool for firms to help in setting their own feeing structure.
    

3. The benchmarks report

   Extracts from the previous year's report are published in the Journal and the full range of Benchmarks produced include profitability; support staff/fee earner ratios; salary levels of assistants and salaried partners; outlays outstanding; and bank borrowing/credit. Taking part lets firms see how their firm compares with others of a similar size and location.
    

4. Prize draw

   Every firm whose questionnaire is received by Dr. John Pollock prior to the end of August each year will take part in a prize draw. Alex Quinn and Partners, the well known firm of Law Accountants, have sponsored this event for some time now.
    

5. Confidentiality 

   As ever, confidentiality is guaranteed by the use of code numbers so that Dr. Pollock knows the figures of those firms taking part but not their names and the Society know who has taken part but not the figures.
    

6. If you wish more information contact the Society on 0131 476 8124