Bleak Economic Times Pressing Hard on Law Firms

Results from the Law Society’s Law Management Section (LMS) financial benchmarking quarterly has pointed to worsening cashflow pressures amongst law firms. Of the 51 participating firms, 40% of law firms are experiencing more cashflow problems than in the previous quarter.

One in eight of the practices had introduced new capital to ease cashflow, a similar number choosing to limit partner drawings. A third of the firms reported operating within 25% of their overdraft limit. Tellingly, one-third of the firms surveyed are considering a merger with another practice.