Smaller legal firms have reported a rise in fee income despite the depressed economy – with residential conveyancing up in the usually weak third quarter of the calendar year.
The second quarterly benchmarking survey from the Law Society’s Law Management Section shows a 7.4% increase in fee income for the quarter to 30 September compared with the previous quarter, and a total 7% higher than the same quarter the previous year.
Compared with the previous three months, residential conveyancing was up by 12%, commercial work by 9%, and personal injury work was up by almost 2%. The fee income from family work remained static.
Of the 54 small and medium-sized practices surveyed, 12% had made staff redundant during the quarter.
Cashflow continued to be an issue for some respondents. Partners in 12% of firms had introduced new capital into the practice to ease cashflow; a similar percentage said they had restricted partner drawings.
The quarter included payments on account for 2012/13 tax. Despite this, only 21% of firms said their cashflow was under more pressure than in the previous three months and 23% said it was under more pressure compared with last year.
Asked about professional indemnity insurance renewal, firms reported a median 4% reduction in premiums, with less than a third seeing their premiums increase.
Commenting on the findings, section chair Chris Hart said: ‘I am pleased to see that survey participants are reporting an improvement in fee income, although cashflow clearly remains an issue.’
Vice-chair Andrew Otterburn said: ‘When you consider the state of the economy, it’s very good news that firms have seen increased volume and fee income. It’s especially good news for residential conveyancing, as the quarter July to September is not normally good for them.’