Knowing just how your business is performing is a crucial aspect of running a successful firm.
Completing our financial benchmarking survey, which is completely confidential, helps firms of all sizes, from sole practitioner and high street firms to large scale commercial firms, assess their financial performance and also provides insight into the financial health of Scotland's legal sector as a whole.
All firms are invited to take part and cashroom partners will receive an email from independent researchers Tribal. All you require to complete the free and confidential online questionnaire is your firm’s most recent set of accounts and Master Policy renewal information. Technical support is available from Tribal if required, and participants can claim up to three hours CPD.
All respondents will receive a confidential report for their firm as well as access to the general report on the financial health of Scotland’s law firms which will be published on the Society website. Participating firms can view and compare:
- income and costs by the size or location of a firm
- a breakdown of the firm’s total costs
- cashflow management
- the relationships between the different results for their firm, e.g. plotting your staff costs against profitability
"It’s been very useful to be able to view the firm’s income versus costs much more clearly. We are also monitoring our cashflow much more closely as a result of taking part in the survey and will consider a number of matters, including interim feeing. In addition to being a useful exercise for the firm, it’s very interesting to see the survey results and be able to benchmark ourselves against others in the sector."
The 2018 survey findings showed that profits per partner (before outlays) for all respondent firms increased to £76,000, up from £69,000 in the 2017 survey. Larger participating firms with 10+ partners, showed a significant rise in the median profit per partner to £172,000, a 38% increase on last year’s findings.
The results for the other sizes of firms were relatively static at £79,000 for 2-4 partner firms, down from £82,000 in the 2017 report, and £94,000 for 5-9 partner firms, which showed a small drop from £96,000 the previous year. The findings for sole principal firms taking part in the survey, which had a median profit per partner of £48,000, down from £50,000 in the previous year, suggest that they are continuing to operate at the margins of commercial viability.
86 firms completed the 2018 questionnaire, representing 8% of firms in Scotland.
2-4 Partner Firms
- Capital per partner at £99,000 continued an upward trend since 2014. The result for 2017 was £86,000 and for 2014 was £54,000.
- Overall, 2-4 partner firms were in robust financial health, with good bank balances and low amounts of aged debt.
5-9 Partner Firms
- The median total profit margin for 5-9 partner firms at 30% was in line with the median total profit margin for 2-4 partner firms, also 30%.
- The median bank balance for 5-9 partner firms was £86,000, an improvement on the 2017 result of a debit balance of £2,000, and on 2014’s result of a credit balance of £30,000.
- Median capital per partner was £119,000; up from £67,000 in 2017.
10+ Partner Firms
- Property/conveyancing income per partner of participating firms was the highest in 10+ partner firms, with a median result of £209,298.
- Staff costs as a percentage of total income were broadly in line with other firm sizes, at a median of 36.3%
- Debtor days were much higher for 10+ partner firms, with a median result of 71 debtor days
- Median capital per partner was £98,000, slightly lower than 5-9 and 2-4 partner firms
Read our news release.
Each year the Society commissions research on the cost of running a solicitor's practice. The financial benchmarking survey provides a good indicator of the general financial health of the profession on an annual basis. It is also a benchmarking exercise which helps solicitors set realistic fees and measure their own performance. Historically the report was valued by the Lord President's Advisory Committee in relation to the Tables of Solicitors' Fees in the Courts.
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.