Many Midlands lawyers are top fee millionaires, according to a new report.
More than half of law firms in the Midlands reported an increase in headline profits last year and their equity partners are among the highest fee earners outside central
London, says PricewaterhouseCoopers' 2005 Financial Management in Law Firms survey.
Fifty-four per cent of Midlands' law firms reported an increase in headline profits and around one in three equity partners earned fees in excess of £1 million per head.
Indeed the earning potential of equity partners in the region is among the highest outside central London.
The bonanza is less to do with a growth in work - more down to lawyers having to work harder.
The survey reveals that part of the reason for the upturn in profitability could be a sharp decrease in the number of fee earners overall.
In fact, law firms in the Midlands reported the biggest decrease in the number of equity partners in 2005, compared with counterparts in other parts of the UK and the second biggest decrease in the number of fee earners.
Staff turnover levels remain an issue, with 50 per cent of firms in the Midlands reporting a fee earner rate of between six and ten per cent.
David Waller, Midlands chairman at PricewaterhouseCoopers, said: "Law firms in the Midlands are at last seeing some benefit from the significant head count reductions of the past few years, enabling firms to increase staff utilisation levels and improve profits.
"However, this has been at some cost and in the coming year law firms in the region will face pressure to support future growth by improving pay and benefits for fee earn-ers at all levels, investing in recruitment and training and generally aiming to reduce staff turnover."
Looking ahead, 55 per cent of law firms in the Midlands are optimistic about the future, reporting that they expect their trading position to strengthen in 2006.
The majority of firms in the region (82 per cent) forecast profits per equity partner to rise in the coming year and a similar number expect to increase their fee earner headcount.
One area of opportunity in the year ahead is the potential for international growth. According to the survey, more than half (63 per cent) of the Top 25 UK firms aim to grow their international business by servicing from an existing UK base and a further 22 per cent aim to set up a new overseas office in the coming year.
Risk management will also continue to be a priority issue for law firms in the region.
Some 82 per cent of the Top 25 firms have formalised risk management procedures - more than twice as many as last year - and moves to limit the liability of firms are becoming commonplace.
Mr Waller said: "Overall 2005 was a strong year in terms of profitability for many firms in the region, which has been achieved largely as a result of cost cutting and overseas expansion.
"However, the market remains fiercely competitive in terms of winning clients and recruiting and retaining quality staff. If firms are to achieve or exceed the profitability levels of 2005, they will need to focus on achieving real competitive advantage by mini-mising risk and optimising working capital."