As the economic situation brightens and levels of work in high fee areas such as real estate, corporate finance and M&A return, UK law firms are looking to expand and they are increasing their borrowing to do so, our research has found.
Long term lending to UK law firms has risen to £7.35 billion, up 28% over the last four years. Typically, UK law firms have been borrowing in order to fund new teams, open new overseas offices, and to invest in more sophisticated management information systems and other IT services. Borrowing is also used to fund mergers with competitors, an area which has seen a large amount of recent growth.
Firms are looking to benefit from the recovering market, re-establishing themselves as leaders in the UK and internationally. The high level of growth within the legal profession is a vastly different picture from the recession where lending to even the largest law firms was in decline.
It’s encouraging to see law firms able to access the funding they need in order to invest and grow and their expansion will be hugely beneficial for the UK economy.
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