The Cumbrian legal sector is bouncing back as the British economy picks up, according to a recent investigation into the Cumbrian legal sector.

The report comes from MHA, the UK-wide group of accountancy and business advisory firms, in partnership with Kendal accountancy firm Moore & Smalley.

It says that the Cumbrian legal firms of all sizes have a much more positive outlook, helping to ease the financial pressures experienced in recent years.

The annual review says that demand is growing for legal services in the commercial and residential property sectors, with confidence also returning to many practices active in corporate transactions.

Report highlights include:

•Significant growth in total fee income generated by practices with more than 11 partners.

•Extraordinary growth in profit per equity partner in 25+ partner practices as a result of mergers

•‘Lock-up days’, the time it takes to get paid for billable work, have reduced for all sizes of practice, other than sole practitioners

•Expenditure on staffing remained consistent, but is expected to increase this year

•Practice costs of rent, marketing, IT and professional indemnity insurance all saw an average reduction as a percentage of income, with the largest firms enjoying the most considerable percentage decrease in these overheads.

Karen Hain, professional practices partner at Moore and Smalley, and head of the professional practices group at MHA, said: “Large practices have succeeded in making true economy of scale savings in overheads and running expenses, while still increasing top line fee income.

“We have also seen a reduction in equity partner numbers, so that these fewer individuals are really benefitting from higher rewards derived from personal capital invested in the business.

“We are seeing far more movement this year in smaller practice mergers, most of which is driven by succession planning issues.”

As the results from last year predicted, personal injury work is dwindling, meaning a reduction in income.

Many firms are now looking for new areas of litigation to replace the falling workload.

Legally aided funded practitioners are experiencing further cuts to income levels and are under continued fee pressure.

It is predicted that in 2016 we are likely to see more consolidation in the sector, with further merger activity expected.