Scots law firms’ profit margins among UK’s best

Scotland’s law firms have among the best profit margins in the UK, according to an annual report. In its Legal Benchmarking Report, the Royal Bank of Scotland found that profit as a percentage of fees was 27 per cent in Scotland and that firms had increased their fees by an average of three per cent in 2016. More than 80 Scottish law firms and 269 across the UK took part in the survey. Profit margins in the UK as a whole were of 23 per cent and 32 per cent in London. Small Scots firms performed the best in their category with a median profit of 26 per cent. As for profit per equity partner (PEP), small Scottish firms saw an average of £84,000, comparable to £117,000 for similarly sized firms in London. For larger firms, PEP in Scotland was £146,000. Only firms in the Midlands and Wales came in lower, at £137,000. The average fee brought in for each equity partner at small Scottish firms was £307,000 — the lowest in the UK. Large firms in Scotland were also at the bottom, with fees of £475,000. But for all fee earners the average in Scotland was £136,000 — in line with the UK as a whole and trailing only behind London and the southeast.