Finance

There is a “real profitability divide” between larger and smaller law firms although income is generally increasing across the board, new research has found.

Large law firms are damaging their profitability by poor scoping of work and under-pricing it, and are also set to penalise lawyers who offer clients overly large discounts, a survey has found.

Leading trade union law firm Thompsons is facing a strike over pay – and pickets lines at its offices across the country – organised by a trade union. It blames the squeeze in PI for not meeting the demands.

Sole practitioners have overtaken small firms with two to four partners in terms of profit per equity partner, a survey has found. Sole practitioners also led the way in fee income growth compared to larger firms.

Last year saw solid real-terms growth for mid-sized law firms, with median growth of 4.2% the result of increased fee income rather than simply more fee-earners, new figures have shown.

The number of insolvencies among solicitors’ firms reached a new high last year, Insolvency Service figures have shown, and a funder has warned that ‘loan stacking’ will only make things worse.

New guidance on delegated authority claims handling by lawyers may create additional VAT costs for law firms and lead to disputes with their insurance clients, accountants have warned.

Barristers would be “well advised” to make proper provision for tax liabilities given the “episodic” nature of their income, a tribunal has cautioned after upholding a fine against a QC hit by legal aid cuts.

Litigation is not a “blank cheque” and divorcing people cannot behave on the basis that they are bound to be reimbursed for their costs, a leading family law judge has warned.

The High Court has ruled that a partner in a law firm who paid himself £16,500 after he had left the firm and was “effectively competing with it” breached his director’s duties.