Law firms saw steady growth in 2024, according to the Law Society’s new Financial Benchmarking Survey.
The research shows that the legal sector remains resilient even in uncertain times, providing stability and contributing to the UK economy and overall prosperity. Law firms’ average earnings grew by 6.1% last year. While earnings are still growing, the rate of increase is slowing down (from 6.8% in 2023), and costs are rising.
The legal sector has a combined direct and indirect contribution to the economy worth £74.4 billion and exported £9.5 billion in 2023.
The legal sector also continues to be a big employer supporting more than half a million people either directly or indirectly. The number of solicitors and other legal professionals increased by 3.4%. Total salary costs as a percentage of fee income also increased by 1.1 percentage points as well as the number of chargeable hours. Richard Atkinson, president of the Law Society of England and Wales said:
“Despite rising costs and a slowing growth rate, law firms are still performing well. The legal sector remains healthy, continues to be a powerhouse of the UK economy and a significant employer. Solicitors and law firms are committed to helping to build a robust economy that competes internationally while contributing to the country’s prosperity and supporting local communities.”
Key findings from the Financial Benchmarking Survey include:
- Law firms’ earnings grew by 6.1%
- Income growth is slowing down from 6.8% in 2023.
- The cost per legal professional has increased on average to £67,476 up from £63,614 in 2023.
- A growing workforce, with the number of legal professionals increasing by 3.4% and total salary costs as a percentage of fee income rising by 1.1 percentage points.
- Business costs are increasing as overhead expenses grow to £45,796 from £42,844. Lock-up days, which is the time it takes to collect payments, rose from 143 to 146.
