Finance

Fee income at SME law firms is on the up, but profits are not matching the growth, with staff and premises costs among the causes, new research has found. There was a “dramatic growth in income” at London firms in particular, with “high-value project work… back on the desk” as corporate deals gathered pace.

There is a serious lack of transparency over the pricing of common legal services, major new research has found – with those providers who do publish their rates and also the ones who offer fixed fees generally cheaper than law firms that do not.

This year could see small and medium-sized law firms struggle to match the growth of 2014 and 2015 as business levels settle into a new, post-recession norm, a major survey by NatWest has suggested. The bank also said that partners should be asking themselves whether the profit they made in 2015 was sufficient.

Law firms are “in good shape financially”, with median income increasing by 5.4% last year, according to Law Society research. The survey found the median fee income for a partner had reached almost £620,000 and a solicitor almost £118,000 – but more partners than last year are drawing too much.

At a time when “the cost of legal services has generally been allowed to rise to unsustainable levels”, lawyers and the clients need to reconnect the four key ingredients that go into the purchase of legal services – cost, price, value and relationship – Professor Stephen Mayson has argued.

The Solicitors Regulation Authority’s plans to relax the rules around accountants’ reports have been formally approved by the Legal Services Board, meaning that around 1,000 more law firms will not have to submit one in future

Some partners in small law firms are charging £50 per hour – only £10 more than the lowest paid fee-earners, a survey has found. In some firms equity partners took home less than non-partners.

An American celebrity attorney who acted for Michael Jackson has lost a High Court battle with Barclays Bank over a $540,000 loan relating to his time as partner in failed US firm Dewey & LeBoeuf.

HM Revenue & Customs has given solicitors a week to pay the tax they owe on undeclared income or “face hefty penalties” of 100% on the unpaid tax and the risk of a criminal investigation.

Solicitors will soon be able to ditch client accounts and instead use “third-party managed accounts”, their regulator has revealed. THe SRA said the use of such accounts may offer a lower-cost alternative that continues to provide appropriate protection.

Smaller law firms continue to see merger, rather than external investment or bringing in non-lawyer owners, as the more likely path to growth, Law Society research has found. It also found that the majority of practices polled are now recording net profits ahead of where they were before the recession.

A legal advice business run by a struck-off solicitor has been ordered into liquidation in the High Court on grounds of public interest following an investigation by the Insolvency Service.

Small to medium-sized UK law firms are enjoying a sustained period of economic recovery, but face new challenges arising from renewed growth, according to a major study examining a wide range of performance indicators.

Express Solicitors, the Manchester personal injury firm, is poised to make further acquisitions after securing £10m funding from the Royal Bank of Scotland. It said the money allowed a focus on growing the business “without having to compromise” on other areas.

The Bar Council has joined forces with a legal credit finance specialist to enable direct access barristers to offer payment plans to their clients. BARCO, the Bar’s escrow account, will hold the loans obtained for clients by Legal Cost Finance.