Small and medium-sized law firms have experienced a significant increase in the number of thefts from client accounts in recent months, a study has revealed.
The research, published by NatWest, found that one in four (24 per cent) SME law firms has suffered a cyber-attack or fraud-related loss in the last 12 months.
It said larger firms were more likely to be targeted than smaller, less profitable firms.
Cyber criminals largely targeted the north-east and north-west, it added, with 37 per cent of firms in those regions experiencing cybercrime.
The study also revealed that cashflow continues to be an issue for the majority of firms. Despite fees generated by equity partners rising by 12 per cent, it says it would take just 40 days on average for capital to run out if income dried up.
The report’s author, Robert Mowbray, said: “This represents a surprising drop given that the fee income being generated by firms is rising. This would then suggest that perhaps firms are too quick to take on new staff rather than thinking about how the productivity of existing staff could be improved.”
Correspondingly, it found that the median fees generated per fee-earner dropped 5.6 per cent. It says that the overall median figure of 866 hours per fee-earner equates to just 3.9 working hours per day.
“This does not tally with how most fee-earners tell you that they are working hard on client matters for most of every working day and that this often continues when they leave the office as it is increasingly easy to work remotely with the help of technology,” said Mr Mowbray.
Steve Arundale, head of commercial professional sectors at NatWest, added: “The legal sector is confronted by many challenges, from the rise in cyber-related crime to the increasing difficulty in managing lock-up.
“However, year-on-year PEP continues to improve and the 2016 performance is 33% up from 2013. Fees have also grown 5% which is still considerably above inflation.”