A report on the finances of law firms in England and Wales has described their performance in the 2022/23 financial year as “resilient” amid tough economic conditions.

The Law Society of England and Wales’s Financial Benchmarking Survey 2024 shows that almost three-quarters of firms recorded annual growth in income.

While median fee income for practices rose by 6.8%, median net profits per equity partner fell for the second year in a row – down 0.7%, from Stg £211,204 to £209,650.

‘Resilience’

Amid higher interest rates, firms benefited from a jump in interest received on money held in client accounts. Without this, the fall in profits would have been almost 8%.

Chargeable hours also fell, with firms reporting a median of 793 chargeable hours per fee earner, compared with 816 in the previous 12 months.

Firms’ non-salary costs also rose.

“The resilience of law firms shines through this year’s survey,” said Paul Bennett, chair of the Law Society’s leadership and management section. “Economically, it is a tough period, but firms are doing well.”