The Law Management Section Financial Benchmarking Survey 2020 summarises the financial performance of the participants prior to the onset of the coronavirus (Covid-19) crisis.
It shows:
- that more than a third of participants had seen an increase in practice income of more than 10%
- a slight fall in median profit per equity partner to £155,897 from £161,823 the previous year
- a fall in total year-end lock up days (WIP and debtors combined) of five days to 142 days
- a 12% increase in median equity partner capital (combined total of capital account, current account and tax reserves) to £219,691 per equity partner
60% of the participants provided information based upon their financial years to 31 March or 30 April 2019. Anecdotal feedback shows that many firms have found the subsequent year more difficult due to the impact of ongoing Brexit uncertainty and the general election.
The onset of the coronavirus (Covid-19) outbreak and the stay-at-home measures in March 2020 creates huge uncertainty for law firms including:
- the difficulty furloughing staff and reducing the payroll whilst retaining staff loyalty and goodwill
- cash flow, both in the short term during the lockdown but more importantly in the longer term once it has been lifted
- significantly reduced numbers of new matters
- increases in professional indemnity insurance
