Equity partners at law firms have seen their earnings surge in recent years, outpacing both barristers and the wider UK workforce. Figures released by HM Revenue and Customs reveal that self-employed solicitors reported average profits of £307,000 in the 2022/23 tax year, compared with £216,000 in 2018/19. The increase of 42% over five years is more than double the 18% rise in average UK salaries during the same period.
Barristers have not shared the same level of prosperity. Their average profits increased from £150,000 in 2018/19 to £188,000 in 2021/22, but slipped back to £180,000 the following year. This is a 20% gain across the five-year period. Here, you can read more about income at the bar. Analysts suggest that factors such as a greater use of alternative dispute resolution and pressure on legal aid payments have restricted their growth.
Drivers of law firm earnings
The rise in law firm partner income has been attributed to strong demand across key practice areas and the ability to increase hourly rates. Some practices even recorded growth during the pandemic, helped by cost management and the continued activity of sectors like property and litigation. Large and mid-sized firms, such as www.forsters.co.uk/, are often cited as examples of organisations benefiting from this sustained demand.
Outlook and financial resilience
With profits rising faster than inflation, partners at London law firm practices are encouraged to think carefully about long-term planning. Analysts argue that reinvesting earnings and strengthening financial resilience may help them weather any future economic slowdown, while maintaining the strong position achieved over the past five years.