A survey carried out by the Law Society of Scotland of Scottish law firms’ finances has shown improving fortunes for smaller law firms.

The results which came from a new Financial Benchmarking Survey has shown that profits per partner (profit before tax and allowances for equity partner salaries) for the respondent firms have remained relatively static since the previous Cost of Time survey in 2014, at £69,000.

The figures also indicate that firms with 2-4 partners are closing the gap on slightly larger firms of 5-9 partners, with regard to profitability per partner.

The Financial Benchmarking Report 2017, published in association with Clydesdale Bank, has shown that 2-4 partner firms’ median profits rose by 11% to £82,000 per partner and that respondent firms of this size were largely in good financial health, with good bank balances and low debt.

There has also been an increase in profitability for sole practitioners taking part in the survey, from £41,000 to £50,000 since 2014. Median profits for sole practitioners in Glasgow were low at £40,000, although they represent an improvement on the 2014 figure of £26,000.

The survey’s findings have highlighted some of the pressures facing firms in the 5-9 partner bracket, with just a 4% increase in median per-partner profits of £96,000. The findings also showed median bank balances were overdrawn by £2,000, falling from a credit balance of £30,000 in 2014. This result may reflect the financial health of the sample of 5-9 partner firms that participated in the survey, but is notable nevertheless.