'Firms don't have enough net cash to pay their next payroll' – what are the warning signs for the UK top 50?
LLP accounts reveal operating profit margins slipping, staff costs rising and a limited cash safety net at many firms
June 14, 2018 at 10:45 AM
2 minute read
The original version of this story was published on Law.com
The wealth of information in law firm limited liability partnership accounts offers an insight into the state of health of the UK's largest law firms – as well as the warning signs they need to be looking out for.
In this video, Smith & Williamson head of professional practices Giles Murphy talks to Legal Week editor-in-chief Georgina Stanley about the key takeaways from the 2016-17 accounts of the UK top law firms, ahead of this year's financial reporting season.
Topics under discussion include:
- How, despite an increased focus on efficiency and the introduction of new technology, operating profit margins are slipping year on year
- The limited safety net firms have in terms of their cash position
- How law firms compare to other professional services sectors
- The impact of startups, external investment and the Big Four on the legal market
- How firms can better prepare themselves for uncertain conditions and Brexit's impact
This is the second in a series of articles analysing the 2016-17 LLP accounts of the UK top 50, in association with Smith & Williamson. Other subjects under the microscope will include profit, debt and how the magic circle compares to the rest of the market.
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