Mo partners, mo problems: A quarter of law firm partners take more money out than they make in profits

 
Emma Haslett
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Michael Morling retail manager of legal
The number of law firms where partners took out more than they earned has risen (Source: Getty)

The proportion of law firms whose partners are taking out more money out than they earn has risen, a new study has found.

The Law Society's Financial Benchmarking Survey found the number of firms where partners' salaries exceeded income rose to a quarter, from a fifth last year

And Robert Banner, chair of the Law Society's law management section, suggested the actual figure might be higher.

"The firms that take part in the... survey usually have a particular interest in high performance and management," he said.

"If a quarter of these firms are over-drawing then the proportion over-drawing for the rest of the profession is likely to be higher."

But the survey also suggested that law firms are, on the whole, making more, with the median income rising 5.4 per cent - the sixth year in a row it has risen - while net profit per partner rose to £146,000, the figure's fifth consecutive rise.

That said, breakeven point for fee earners also rose, from £102,000 last year to £109,000 this year, largely thanks to increases in non-salary overheads.

"There is no doubt that most mainstream legal practices are in good shape financially, and more confident as a result," said Jon Cartwright of Hazlewoods, which undertook the survey.

"Medium term strategy planning is now firmly back on the agenda, although clearly some areas such as personal injury and criminal continue to be tricky.”

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