In muddy waters, profit margin provides some clarity about best-managed firms
There is no 'silver bullet' metric for measuring the strength and performance of law firms. But profit margins may be a better guide than much-maligned, though closely followed, profits per equity partner (PEP). Average net profit margins at the top 50 firms by revenue – at least the ones that disclose full financial performance – have remained fairly stable over the past three years, rising from 25.8% in 2010-11 to 26.6% in 2011-12, before slipping back to 26.2% in 2012-13, according to Legal Week analysis.
Stable profit margins prove lawyers are learning to be flexible as incomes fall, says Grant Murgatroyd
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