Law firms have to wait three months to be paid, far longer than most other businesses.
Finance provider LDF said the delay puts firms under financial pressure. It analysed 321 firms and found the average period between a bill being issued and payment received was 94 days.
The average is 41 days in the UK, according to the European payment index. Under the EU late payments directive, businesses can charge interest and recovery costs after 60 days, or 30 days if the client is a public authority.
Peter Alderson, LDF managing director, says: “Waiting more than twice longer than the UK average to be paid for work carried out, and still far in excess of the timeframe that the late payment rules state, is putting many law firms under huge financial strain. For many firms this disruption to cashflow is not easy to absorb, at a time when the financial pressures they are under from increased competition, squeezed margins and the impact of recent regulatory changes such as legal aid cutbacks and changes to no-win, no-fee cases are already intense.”
