For the last 20 years, the Law Management Section has undertaken an annual Financial Benchmarking Survey.

It’s the leading survey for medium-sized and smaller firms in England and Wales, providing participants with a bespoke report showing how their firm compares to similar firms.

To complement insights from the annual survey, we’ve developed a quarterly pulse survey with our futures and insights team to provide a timely barometer of business conditions for small and medium-sized (SME) solicitor firms.

This paper reports on firms’ experiences of quarter two (Q2), 2021. 163 firms took part.

Main points

  • Activity levels are higher for Q2 than for quarter one (Q1)
  • Staff are returning to the office
  • 58% of firms reported an improved cash position and 36% predicted a better cash position for quarter three (Q3)
  • Business confidence remains high, with around half of firms predicting an improvement in firm’s fees (54%) and profitablity (49%) for the next twelve months

Income, expenditure and new work

  • Compared to the previous quarter, around half of firms had experienced increases to new work (55%) and in fees billed (58%) during April to June 2021. Of firms offering residential conveyancing, 66% saw an increase in new matter starts for this area
  • Under one-fifth of firms reported decreases in relation to new work coming in (18%), chargeable hours recorded (16%) and fees billed (16%)

Staffing and office space

  • For the majority of the 163 participating firms, staffing and office space had remained the same as the previous quarter
  • 3% firms reported redundancies during the April to June quarter
  • Of firms with physical premises (96%), 12% had reduced their office space and 12% anticipated a reduction in the next quarter

Cash position

  • 581% of the 163 participating firms reported a better cash position compared to the previous quarter, 13% reported a worse position
  • 25% of responding firms anticipated a worse cash position compared to the previous quarter
  • Of the 93 firms (57%) which took a Coronavirus Business Interruption Loan Scheme (CBILS) loan, 45% have used the loan

Business confidence

  • Businesses were confident in their outlook for the next twelve months, with around half predicting an improvement in firm’s fees (54%) and profitablity (49%)

Merger, takeover or amalgamation?

  • 13% of firms reported being in active discussions regarding a merger, takeover or amalgamation.

Participating firms

Thank you to the 163 firms who took part in the first pulse survey. This survey provides insight into how your firm compares with other SMEs in the sector.

Lloyds Bank logo

“The Law Management Section pulse survey is new and intended to support the profession with some detailed data collection on current issues every quarter. We are delighted with the level of response and would encourage firms to participate next time and to help us grow the survey so they have the chance to help shape the knowledge of the current issues.”

Paul Bennett
Chair of the Law Management Section