The bank is encouraging more flexibility in the structures of firms - particularly by using contract lawyers and taking on lower-costing workers such as paralegals. James Tsolakis, head of legal services lending at RBS, said: ‘Recognising that profit growth is not increasing at the same rate as turnover, the pursuit of higher value instructions combined with effective cost management must be continuing themes driving law firm strategy and future profitability.’
Demand constrained
He added: ‘Demand for legal services remains constrained. Accompanied by a continuing level of fee-earner overcapacity relative to the demand for legal services, pressure continues on billing rates, margins and profitability.’ Source: Financial Times
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