Back by popular demand* - the law firm P&L! Previously I presented a simplified P&L account for a law firm, with a plea to focus on improving the big numbers above the gross profit line For simplicity, that P&L ignored equity partner remuneration within gross profit and margin For very small firms, or teams, this can work well enough, but if you have (1) multiple partners, (2) with substantive fee earning/matter delivery responsibilities then we need to introduce a little mor

You can slice and dice a P&L in any number of ways, but I find the simplified presentation here helpful Based on the analysis we did back ~2022/23 in writing The Legal MBA Essentials, we can start with fee income rebased to £100 at the top of the P&L We can then deduct direct delivery costs, namely the salaries of fee earners and remuneration for fixed share partners For the typical UK firm, this is roughly £37. Deducted from fee income leaves us with gross profit of £63 Bene

Back in May '26 Kirkland & Ellis announced a $500m investment over the next 3-4 years to build a proprietary AI platform based around its own knowledge base and in partnership with Palantir Technologies, and then embed that within various client workflows In August '26, I was struck by Thomson Reuters announcing that they had spent $40m using an open source model applied to Westlaw, Practical Law and so on At 10,000 ft it was the gulf between those numbers that caught my eye,