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A Law Society survey has revealed that legal practices are seeing an improvement in fortunes with an average increase of 0.2 per cent practice fee income in 2010, following a reduction of 6.5 per cent in the previous year.
The key findings in the Law Society Law Management Section's annual profitability survey reveal the financial health of law firms. Law Society President Linda Lee said: "Although there are signs of recovery, that process is slow and firms will be looking at how they can continue to grow as we emerge from the recession."
Firms are also beginning to recruit again. The survey reveals that the 200 participating firms reported total recruitment costs of £2,141,614 to recruit 1,022 people, while the average spend on non-salary overheads per fee earner dropped to £35,551, down from £41,959 in 2009.
Now in its 11th year, the survey is widely regarded as the annual health check report for the smaller end of the legal profession.
Commenting on the survey, Chris Marston, Head of Professional Practices at Lloyds TSB Commercial, said: "In many ways this year's survey shows a steady, consolidating scenario, but two things struck me. First was the increase in median net profit per partner from £89,621 to £106,297 - a rise of 18.6 per cent. But more important for me was the measure of profit after deducting a realistic notional partner salary - at 7.3 per cent of fee income this is a terrific improvement on the 2.3 per cent shown in the 2009 survey."
The Red Book is the acknowledged authority on practice and procedure