Finance

Smaller law firms are struggling to retain their junior partners in advance of tough new capital requirements set out by HM Revenue & Customs in its crackdown on fixed-share partners avoiding PAYE tax, an executive search firm has claimed.

The Law Society is set to reduce the cost of practising by around 20%, even though its budget is going up in 2014/15. The net funding requirement for the next financial year is £116.7m, a 3.7% increase on this year’s budget.

Law firms with 11 to 25 partners are leading the way out of recession, with rising fee incomes, net profits and a 21% surge in profit per equity partner (PEP), research has found.

The Solicitors Regulation Authority has unveiled plans to remove the requirement that firms have their client accounts reviewed by an independent accountant and submit an annual accountant’s report.

A leading personal injury law firm has gone public with a unique profitability calculator to make other practices realise how radically the economics of work have changed in the post-LASPO era, Legal Futures can reveal.

A pioneering alternative business structure (ABS) has become one of the first legal practices to introduce employee ownership, while also developing a new form of billing that will see it agree a profit margin with clients, Legal Futures can reveal.

Solicitors will be able to close down thousands of client accounts with residual balances of up to £500 and donate the money to charity under plans unveiled yesterday by the Solicitors Regulation Authority. The regulator is also planning to end the annual ‘keeping of the roll’ exercise.

The UK’s top law firms have become increasingly sceptical about listing on the stock market or taking on private equity investment, according to new research.

Irwin Mitchell has signalled its intention to grow “substantially” in the coming years after securing a £60m four-year finance package with three major UK banks. The deal also includes a £30m ‘accordion’ facility for further finance if required for a big transaction.

Profits were up last year and confidence is buoyant for the coming year among small and medium-sized law firms, according to a major benchmarking survey. Nine out of 10 firms surveyed thought profits would increase during 2014.