The Law Society of Scotland's annual Cost of Time survey has reported the first rise in profitability for law firms north of the border since 2008. Average profit per partner at Scottish firms totalled £71,000 in 2011, on a par with 2004 but well below the highs of 2005-08.

Sole practitioner and small firms continue to be worst affected by difficult trading conditions, in particular firms which undertake legal aid work, with profits per partner averaging around £46,000 for sole practitioners and £75,000 at two- to four-partner firms.

Medium-sized firms of five to nine partners showed strong growth, with a per partner profit of £80,000, up from £66,000 in 2010. Firms with 10 partners or more showed a sharp drop from £178,000 in 2010 to £144,000. However, the report’s authors warn that the sample of large firms was small and included firms who did not participate the previous year.

Law Society of Scotland chief executive Lorna Jack said: ‘The survey shows that there are still very mixed fortunes among our membership and, while it is heartening to see that overall there has been a slight upward swing, it is apparent that smaller firms continue to be hardest hit by the downturn.

‘The report's authors Andrew Otterburn and John Pollock predict that the legal services sector will remain highly competitive, with clients pushing to get more for less, particularly in the current economic climate. We are committed to supporting our members in a rapidly changing environment, which is set to see the introduction of alternative business structures for law firms and increased consolidation, and will continue to promote Scottish solicitors as advisers of choice both at home and overseas.’

Some 238 firms across Scotland responded to the survey.