Law firms' health could detoriorate, warns Grant Thornton
Issues such as staffing and salary levels, productivity and growth strategies could cripple Midlands' law firms if not properly addressed. A new study by accountant Grant Thornton said these issues were "critical" and could lead to business failure.
Grant Thornton's benchmarking report analysed the published accounts of 24 firms - either based in the Midlands or national firms with a significant local presence.
The report highlighted a reduction in staffing within the region’s legal sector between 2008 and 2010 of around 11.5 per cent.
In 15 of the larger legal firms in the Midlands, this equated to a loss of 1,417 jobs.
Martin Ramsey, co-author of the report, said: "Generally, 2010 saw a bounce back in profits compared to a very poor 2009, but this appears to be due to cost control and re-shaping rather than income growth.
"What is apparent is that on average, fee earners are generating more income per person than they were in 2008 and 2009, and most firms have cut back heavily on bonuses and pay increases. It appears that firms are asking staff to do more for less and, while this can be effective as a short term measure, my concern is that it is unsustainable in the long run."
