▪ Australian law firms are sacrificing growth ambitions (forecasts down an average of 2%) to protect partner profitability (up 0.1%).
▪ Gross profit margins have declined 2.2 per cent across all firms to an average of 55.3 per cent, representing a 7 per cent decline over four years.
▪ Average revenue per partner remained consistent across each tier of firm year-on-year, with the largest recorded change in the $5m - $10m category, where partners generated a revenue increase of $113,000 on the previous year
▪ Overall, firms have become less financially resilient despite improved working capital management, according to the Crowe Horwath Financial Resilience Index (2.23 this year compared to 3.02 last year).
▪ Average lock-up days (the time taken to complete matters, invoice and collect fees from the client) reduced, from 155 days to 147 days in this year’s study. Four years ago, the average was 176 days.
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