denotes premium content | Nov 21 2008 FD Legal archive
Volume 1 Issue 2
Editor's foreword
Welcome to the December 2006/January 2007 edition of FD Legal magazine.
As the year draws to a close, it is worth reflecting on the results of PricewaterhouseCooper’s Annual Law Firms’ survey. Now in its 15th year, the survey reveals that 2006 has been an exceptional year for many firms, with average fees per partner and average profits per partner increasing year on year.
In prior years, growth was largely achieved through close control of partner numbers and the cost base. This year’s growth in profitability has been achieved through maintaining a tight rein on equity partner numbers, combined with a strong growth in total fee income. A benign and favourable economic environment has enabled firms to increase their fee income, with over 65 per cent of the Top 25 firms growing fee income in excess of ten per cent and some achieving more than 20 per cent growth (see p28, ‘Trend tracker’).
But there are some areas of concern. Despite the growth in fees and average profit per partner, profit margins remain under pressure due to continuing low levels of staff utilisation (relative to last year), continued salary pressures and high levels of qualified staff turnover.
Elsewhere this issue, Sue Mawdsley of Legal Risk (p6) turns her attention to the thorny issue of money laundering. With new regulations on the horizon, she urges law firms to update and review their anti-money-laundering (AML) procedures, and retrain staff to ensure they are on their guard. Our workshop feature (p20) continues this theme, arguing the case for a risk-based approach to AML, while our case study article, ‘Dare to risk’ (p15), provides an holistic overview of the typical risks facing the modern law firm.
I hope you enjoy the issue. Of course, if you have any issues that you are keen to address, or that you would like FD Legal to explore, please get in touch. Similarly, if you would like to share any of your own project experiences, or have any feedback, you can contact me at jschofield@ark-group.com.
In the meantime, the FD Legal team would like to take this opportunity to thank you for your support of the magazine, and to wish you all a very happy and prosperous New Year.
Jason Schofield
Consulting editor
Features
The survey said?
Now in its 15th year, the PricewaterhouseCooper’s Annual Law Firms’ survey reveals that 2006 has been an exceptional year for many law firms, with average fees per partner and average profits per partner increasing year on year.
The last word: A land of opportunities
The Legal Services Bill will create a land of opportunities for firms brave enough to take advantage. By Peter Scott, Peter Scott Consulting
Peak performance
DMH Stallard has enjoyed some impressive financial results in recent times, with significant growth paralleled by profit hikes. Here, the firm shares its approach to financial management and cultural change, revealing the strategies used to drive better performance. By Tim Aspinall, DMH Stallard
Outsourcing comes of age
Law firms have traditionally kept their distance from outsourcing functions, but many are actively reconsidering it as a means of achieving greater cost control and competitive advantage. By Margaret Lang, Intelligent Office UK
Money laundering: The enemy within
With new money laundering regulations on the horizon, law firms need to update and review their risk-management procedures, and retrain staff to ensure they are on their guard. By Sue Mawdsley, partner, Legal Risk
Dare to risk
Considering the importance of risk management to a profession that is more exposed to the scrutiny of the insurance industry than ever before, it is still an area that is largely undervalued. To mitigate risks effectively, firms must build a framework and methodology for identifying risk and effectively implement a risk-management strategy across the business. By John Goreing, Fladgate Fielder
Anti-money laundering: Is anyone asleep on your watch?
Failure to implement and document money-laundering procedures may lead to criminal sanctions and an irreparable loss of reputation. With so much at stake, the time to mitigate the risks has never been more apt. By Shaun O’Leary, Huntswood Consulting
Accounts receivable: Asset or liability?
Typically, a law firm’s accounts receivable is one of the largest current assets on the balance sheet. But unless given appropriate attention and management, they can all too quickly become a liability. By Stephen Baird, MiniSoft Worldwide
Regulars
Q&A: Free your mind
With the post-Clementi, post-Legal Services Bill world approaching fast, Andy Raynor, chief executive of professional-services firm Tenon Group, provides a few tips on going public.
Thought leader: Cross selling – fact or fiction?
It is a part of the mantra of most firms that cross selling is a ‘good thing’ and something everyone should practice. Partners are encouraged to cross sell (and, in some cases, rewarded for doing so) and it has become almost an unquestionable priority.
