2016 ALPMA/Crowe Horwath New Zealand Legal Industry Financial Performance Benchmarking Study

Location

New Zealand

Report released on

5 December 2016

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2016 NZ Legal Industry Financial Performance Benchmarking Study

The 2016 ALPMA/Crowe Horwath New Zealand Legal Industry Financial Performance Benchmarking survey was conducted in September – November, 2016.  More than forty firms from across New Zealand participated in the study.

Participants have received an email with the results summary (available for download below), plus a login to access Open Measures, which enables them to interactively compare their firm's performance against the results from similar New Zealand law firms using a number of filters including location, practice type and size of firm. For the first time this year, members of NZLaw, Law Plus, LawLink and Law Alliance can view results by group. Firms that participated last year can also see how their firm's performance is tracking over time. This powerful analysis gives firms a relevant and meaningful benchmark to work from—and realistic goals to aim for.

Results from the 2016 Financial Performance Benchmarking Survey of New Zealand include:

  • Operating profits before interest and taxes average $369,000 per equity partner, up from $280,000 in 2015.
  • The 10 best performers have an average operating profit of $659,000 per partner ($396,000 per partner in 2015).
  • Non-equity partners’ salaries average $171,000, 12 per cent lower than in 2015.
  • The median work in progress (WIP) and debtor-days lockup amongst all firms surveyed is 83.09 days consisting of:
    • WIP days of 26.25
    • debtors days of 53.81
  • The average revenue generated per fee earner is around $368,206 compared with $352,000 in 2015 and more than $803,172 per partner, up 12 per cent from last year’s survey.
  • The 10 best performers average $1,308,000 per partner in revenue and the bottom 10 average $422,800 per partner.
  • Average gross margins* are 78.7 per cent and average net operating profits* 38 per cent.

*The gross profit margin is the margin after direct costs, predominantly fee earner salaries, have been deducted. Net operating profit is the profit available to partners before interest and taxes are paid.

About Crowe Horwath

Crowe Horwath New Zealand is the largest provider of practical accounting, audit, tax and business advice to individuals and small and medium businesses from a comprehensive network of over 20 offices. Crowe Horwath is part of a global accounting network that delivers high quality audit, tax and advisory services in over 100 countries. We are the relationship that you can count on – large enough to offer a range of expertise and skills and small enough to provide the personal touch.

Firms and Individuals who participate in these surveys receive a complimentary copy of the research report.

Need more information?

If you have any questions about the research or need assistance, please contact our research team.

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