Small and medium-sized (SME) law firms are prospering again with some exceptions, according to a survey by chartered accountants HW Fisher.
The survey found average turnover growth up 4% in the SME legal sector in London and the south-east. Those with a turnover of £20m-£35m fared best, with an average rise of more than 10%.
The property sector has recovered with a beneficial knock-on effect for firms, where it now accounts for more than a quarter of all work compared with only 14% of the total last year. This has been accompanied by a fall in litigation work from 36% to 26% of the total.
However, the survey also showed that many firms are facing increasing levels of debt.
Paul Beber, partner at HW Fisher, says: “Short-term lending to legal businesses is on the increase with a debt on the books of almost nine out of 10 firms. With the threat of interest rate rises looming, any firm that becomes dependent on such borrowings could find themselves in a downward spiral that is difficult to recover from.”
