Focus on long-term profitable delivery of services, not short-term cost reduction

Competition in the UK midtier legal sector is by far the fiercest and so maintaining profitability is proving challenging for law firms.

Competition in the UK midtier legal sector is by far the fiercest and so maintaining profitability is proving challenging for law firms. George Bull, head of professional practices at Baker Tilly holds a view that of the 200 odd mid-tier law firms, only 50 may survive in the short to medium term. Unlike the larger law firms, the mid-tier category represents squeezed margins and falling profit per partner (PEP), a compensation model that law firms are reluctant to relinquish. Tactics such as downsizing, merger and acquisition and cutting administrative costs have been the typical methods adopted to maintain profits thus far.

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