Senior lawyers saw their incomes boom during Covid as firms boosted profitability
Law firm partners saw their incomes increase 8.3 per cent during the pandemic to heights of £825,331 in 2021, on the back of booming demand for legal services.
Those working as equity partners in English and Welsh law firms saw their fee incomes rise from £761,981 in 2020 to more than £825,000 the following year, according to the Law Society’s annual benchmarking survey.
The bumper payouts come after law firms fared better than expected during the pandemic, despite the challenges posed by Covid-19.
More than two-thirds (69 per cent) of law firms in England and Wales said their revenues increased during the pandemic, while two-fifths (40 per cent) said their revenues increased more than 10 per cent.
Law firms’ bumper revenues came as law firms both capitalised on consistent demand for legal services and also cut costs with the help of government support.
Use of the government’s furlough scheme during the pandemic saw total salary costs as a percentage of fee incomes drop by 2.9 per cent.
More than four-fifths of law firms made use of the government’s furlough payments, by furloughing at least one member of staff over the two-year period covering 2020 and 2021.
Law firms’ non-salary overheads also dropped 2.2 per cent during the pandemic, as law firms saved on rent, marketing, and recruitment costs.
English and Welsh law firms did however spend more money on IT during the pandemic, in a bid to ensure staff were able to work-from-home.
Law Society chairman Paul Bennett said: “The pandemic posed huge challenges for law firms in terms of supporting clients through the most challenging period since the 1940s.”
“Some law firms did exceptionally well, others struggled – to some extent this was likely dependent on which sector or client group they supported.”