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Monday 05 December 2016 10:45 AM
Top-10 law firm partners
average $1.3m in billings a year
By Fiona Rotherham
Dec.
5 (BusinessDesk) – The 10 best-performing law partners in
New Zealand earned average revenue of $1.3 million a year
compared to the bottom 10 who averaged $422,800 per partner,
according to an annual survey.
The survey of 41 law firms
nationwide was conducted by the Australasian Legal Practice
Management Association (LPMA) and Crowe Horwath. It showed
the average revenue per partner was more than $803,171, a 12
percent rise on the 2015 survey.
Non-equity partners’
salaries averaged $171,000, 12 percent down on the prior
year. The average firm had 4.2 full-time equivalent staff
members per partner. Salaries for both fee-earning staff and
non-earning workers also dipped this year to an average
$74,000 and $52,000 respectively. That compares to the
average hourly wage in New Zealand for the third quarter of
2016 of $29.84 an hour, or just over $62,000 a year.
The
sector is more optimistic about the outlook, expecting an
average of 5 percent growth in the next financial year while
74 percent of the firms surveyed expect revenue growth
compared with just 53 percent the prior year.
Crowe
Horwath business advisory principal Glen Gernhoefer said
strong revenue growth was putting pressure on staff and
capital capacity.
“Hiring expectations are very strong
to help balance this with 94 percent of respondents
expecting to hire new fee-earning staff in the next year,”
he said.
The law firms surveyed had average operating
profit margins – the amount available to partners before
interest and tax – of nearly 38 percent, or $369,000, up 7
percent on the prior survey.
Gross profit margins, the
amount left over after direct costs including fee-earner
salaries, averaged 79 percent. On the expense side, rent was
the largest cost at an average 6.9 percent of
revenue.
While other professional service firms are now
using more fixed-fee packages, the law firms showed a move
back to hourly rates at 76 percent of those surveyed, up
from 69 percent last year while only 12 percent did fixed
fees, compared to 16 percent the prior
year.
(BusinessDesk)
ends
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