Small law firms in Scotland enjoyed soaring profits last year but their larger counterparts suffered a decline, according to a key market bellwether.
The Law Society of Scotland’s annual survey of financial performance shows an overall increase from £64,000 to £69,000 in profits per equity partner north of the border.
Firms with 2-4 partners, which make up just over a quarter of the nation’s legal market, reported an average £10,000 rise in PEP, from £64,000 in 2013 to £74,000.
Firms with 5-9 partners posted PEP of £92,000, down from £99,000 in 2013 but up on the £76,000 reported in 2012.
Larger firms continue to achieve the highest profits per partner, although last year’s average of £163,000 was down on the 2013 peak of £197,000.
Median figures for sole practitioners ranged from around £18,000 a year (representing a quarter of sole practitioners) to £91,000. But for sole practitioners undertaking legal aid in Glasgow, the figure was as low as £15,000.
For firms with 10 or more partners, PEP ranged from £120,000 to over £300,000.
Alistair Morris, president of the Society, said: 'In general law firms appear to be recovering in the wake of the downturn, but are yet to reach the same levels of profitability seen in 2008.
'In recent years solicitors have experienced a period of unprecedented change. The economic climate, digitalisation and technology, globalisation and new entrants to the market have all contributed to this change and we have seen significant consolidation within Scotland’s legal sector, including cross-border mergers with UK and global law firms.’
He added: 'We have also seen some high-profile firms fail, but these have been relatively few.’
Scotland’s biggest law firm casualty of recent years was 158-year-old Tods Murray, which fell into administration last October. Other venerable Scottish law firm names that have vanished through merger with larger English firms include Biggart Baillie, McGrigors and Dundas & Wilson.