It’s probably the (reasonable?) inference that a profession that relies so much on paperwork and records, might want to invest a little into it. Shocking, I know.
You’ll have to help me out then with the ball park overhead cost assumptions, because I’m having a hell of a time trying to reconcile solicitors fees with the lack of ability to make a decent profit, and the kinds of salaries (not including dividends I assume?) that you’re quoting.
The chap I mentioned didn’t have a law degree and was never going to qualify as a Solicitor.
Because people don’t tell them the truth. Because it’s an interesting subject. Because they watch Suits. Because Universities charge how ever many thousands and need fresh recruits every year. They come out and can’t get a training contract (depsite Unis having told them it’ll be easy).
Like most things there are too many people doing it which reduces opportunities / earnings.
In fairness, what other career is a better prospect these days? At least there is a recognised career path at the end of it. Plus you get to work with generally decent people and not in some call centre type environment.
But, I wouldn’t want my son to do it.
Large firms of solicitors have high charge rates and they make a fortune. Small ones may have fairly high charge rates, but if so they don’t charge many hours per day. It’s the same with accountants.
There are always exceptions. A small accountant with a strong client base can make £3-400k in fees with only an admin person and an assistant if they are good, but they will be working long hours.
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Adam is right.
Where’s the profit in charging £650 for a typical conveyance taking months to complete and hours of work?
Where’s the profit in a simple will costing £200 which will take you a minimum 2 hours to complete, probably more.
This is the bread and butter of most firms (magic circle excluded).
I agree with the logic, its the same in consulting.
I’m still struggling to reconcile the numbers that you have quoted though. I guess what I’m after is a simple worked example of your average high st practice, with basic assumptions of fees to revenue and then the costs of doing business.
As much as Adam’s example of £300-400k in fees is an exception, I’ve no context to assess whether your example is just another exception at the other end of the spectrum.
In fact, a bit of forward thinking would suggest that as rents/sqft are so high, an efficient electronic document storage could actually be money saving.
I suppose the inertia for an profession steeped in traditional ways of working is very high, although I remember selling a pretty advanced electronic document management system to a solicitors in Lincolnshire over 10 years ago, so it can be done.
If they have electronic storage they would also keep the hard file!
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You can’t scan deeds or Wills, you need the originals.
My firm spend over a million quid on its document management system. While it was anticipated that cost savings from physical file storage could be a thing, it wasn’t costed in. Much more important was the ability for ease of hot-desking and remote working - as soon as you’re not attached to files, you can work anywhere.
This can make sense if you’re full of people who work all over the country. But if you’re a one-man band with an office, there would be no such benefits.
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Contradiction?
At my last firm the secretaries were sat in a cheap office 5 miles from the City Centre to keep costs down.
The idea was that the London office would send me lower value work down. They sent me about 5 things in two years bringing in total fees of about £10k, Their monthly costs targets were so high they couldn’t afford to send anything down. Luckily, I had plenty of work from Cardiff / Bristol and with a part time experienced para legal and a good quality A level school leaver assisting I was billing £50k a month. But, the workload was immense and the stress was unbelievable. I coped but it wasn’t viable long term. They would use you and spit you out.
My lot went for Microsofts DMS, fucking awful.
This is in Cardiff - After a bit of time they typically get a job as a para legal on maybe £18k, then after a few years of that (maybe up to 5 years) they manage to get a training contract on maybe £20k a year for 2 years. Then they qualify and earn £25-£30k. After being qualified for a few years £35k. 5 years pqe+ £40k, 10 years £50k. Then you need to make partnership to earn more than that.
At my last firm I had a really good Oxford graduate sat opposite me on £18k, he starts his training contract this Sept on £25-£30k.
Bristol is typically £5k a year more.
Feck - no wonder the other bloke wanted to be a ticket inspector
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Don’t forget that Legal Aid in the 70’s / 80’s used to be a licence to print money. Firms often relied on this. Legal Aid has now gone or is totally unprofitable.
I think I can summarise the last few hours of conversation:
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Months to complete is irrelevant as its elapsed time not actual input time. The actual number of hours required to complete is more useful.
Depends on the hourly rate of the person appropriately skilled/ qualified to complete the work to determine the actual cost of task and therefore the profitability.
Are you suggesting that solicitors are on the fiddle?
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I hadn’t thought of it like that. 