2014 Annual Law Firms’ Survey
A number of law firms have seen chargeable hours return to 2008 levels. Despite the increased utilisation though, a number of grades do not meet their target chargeable hours.
- After a number of years of low and static chargeable hours, our survey indicates an improvement in staff utilisation, with hours up across most grades and bandings of firms. Despite this positive trend, there are reductions in the fees per chargeable hour, implying that firms are struggling to convert all of this additional chargeable time into increased revenue.
- Opportunities for further improvement exist, with the gap between target and actual chargeable hours equating to under-utilised FTE headcount of 9% in Top 10 firms and 12% in Top 11-25 firms.
- Expected UK headcount reductions in the Top 11-25 firms, following the mergers of last year, has not been seen in this year’s results.
- This year’s results indicate that firms are looking at the shape and mix of the workforce, with evidence of a move towards the use of paralegals in a bid to reduce cost.
- For Top 11-25 firms, the average staff cost per head in Business Services has increased by 24%. The trend in Top 10 firms is similar, but less significant, with an 8% increase. This may indicate a move towards more senior people within business services roles. Firms who have recently merged should also ensure that duplicate roles and costs have been removed, or that there is a timely plan to do so.
- Total headcount in the business services population has generally reduced. This masks a reduction in secretaries and an increase in other business services staff.
- Women still only account for 17% of the full equity partner population in Top 10 firms, with the statistic in Top 11-25 firms even lower (15%).