The annual survey of law firms’ financial performance in 2013-14 has shown an overall increase from £64,000 to £69,000 in profits per equity partners. (Profits per equity partner are amounts before salary, tax, and other business costs). Smaller firms, which make up just over a quarter of the Scottish legal market, performed better during 2014, with two to four partner firms showing a rise in profits per partner from £64,000 in 2013 to £74,000. Firms with five to nine  partners showed profits per equity partner of £92,000, a drop from £99,000 in 2013 but improved from 2012 figures of £76,000. Larger firms continue to achieve the highest profits per partner, although this year showed a drop from 2013 figures, which peaked at £197,000, to 2012 levels of £163,000 profit per partner.

Overall health

Alistair Morris, President of the Law Society, said: 'The annual survey gives us a view of the overall financial health of the profession. In general law firms appear to be recovering in the wake of the downturn, although they are yet to reach the same levels of profitability seen in 2008. In recent years solicitors have experienced a period of unprecedented change. The economic climate, digitalisation and technology, globalisation and new entrants to the market have all contributed to this change and we have seen significant consolidation within Scotland’s legal sector, including cross-border mergers with UK and global law firms.' 

Low profits

He added that there was 'increased optimism within the profession about the future and the report’s figures indicate a more buoyant legal market.  However,  despite the overall rise in profits per equity partner, the survey has also highlighted very low profit per equity partner levels for some firms – as low as £15,000 for some sole practitioners in Glasgow. These very small firms often undertake legal aid, providing a key service within their communities, and it underlines the need for us to continue to press for an appropriately funded system to ensure that people can access the legal advice and services they need, regardless of their financial situation.”