Mid-market law firm benchmarking 2023-2024
In the past few years, the legal services market has experienced a strong period of growth. Whilst this increased growth is now starting to show signs of slowing down, law firms continue to perform well, even with ongoing market challenges, such as the war on talent, the increased adoption of technology and AI and, more recently, the disruption to the market caused by the increase in private equity backing for professional firms.
What key performance indicators (KPIs) are important to law firms?
Among small-to-mid-tier law firms, where competition is high, KPIs are important tools to help firms manage their business and track the health of their firm. Having good-quality financial information is key to the success of any law firm and preparing monthly management accounts alongside budgets and forecasts can help you understand how your firm is performing and help you plan ahead. These KPIs can then be used to benchmark your firm against your key competitors, leading to more informed forecasting and decision-making.
The KPIs we focus on in this report are as follows:
- Revenue – including revenue growth, fees per partner and fees per fee earner.
- Expenditure – including costs as a percentage of revenue, staff costs and staff turnover trends.
- Profitability – including operating profit margins, profit per partner and profit per equity partner.
- Lock-up – including debtor days and WIP days.
- Other KPIs including net assets, hourly rates and success factors.
Our benchmarking analysis included 211 law firms which were split into categories dependent on their size by reference to their annual revenue. The categories based on annual revenue are as follows:
- £10 million – £25 million;
- £25 million – £50million;
- £50 million – £100 million.
We have produced this benchmarking report covering all the KPIs listed above to give you an idea of how your firm is performing against your peer group.
Click below to read and download the full law firm benchmarking report for the mid-market.
We have access to a wide range of data and can provide bespoke tailored benchmarking reports for individual firms and expand on further interesting KPIs.
If you would like information on a bespoke benchmarking report for your firm, or if you have any queries on other business advisory or accounting issues, please get in touch with our law firm specialists.