2017 Legal Benchmarking

Discover what it takes to earn above average profits in today’s legal services market

I bank with Macquarie

What drives higher profits for law firms?

The Australian legal services industry is in transition. Across the market, firms tell us they are under pressure from cost-cutting clients, innovative competitors and disruptive technologies. Many have responded by rethinking the way they do business — introducing new systems, investing in technology and refining their client offering.

In these benchmarking results, we take a closer look at how firms of different sizes are remaking themselves, and discover what it takes to earn above average profits in today’s legal services market.


Let’s look at the numbers

Because smaller firms have greater scope to achieve high margins and rapid growth, we’ve used distinct performance benchmarks for large, mid-size and small firms, centred on each group’s average profit.

LargeMid-sizeSmall
Firm size
Gross fees
over $20 million between $4m and $20 million less than $4 million
Number of firms 27 70 165
Higher profit
Profit margin
17% or higher
11 firms
25% or higher
35 firms
26% or higher
66 firms
Lower profit
Profit margin
less than 17%
16 firms
less than 25%
35 firms
less than 26%
88 firms

The high performers

LargeMid-sizeSmall
Average profit 24% 37% 46%
FY2017 revenue growth 7.2% 2.7% 14.2%
FY2017 profit growth 15.3% 3.8% 21.6%

What makes them different?

While they have many features in common, different sized firms tend to have different strengths, providing an insight into the shape firms of the future will take.

LargeMid-sizeSmall
Efficient
Client-focused
Forward-looking
Efficient
Automated
Focused
Lean
Reliable
Specialised

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