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8678.0 - Legal and Accounting Services, Australia, 1995-96  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 10/11/1997   
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PREFACE

As part of its service industries survey program, the ABS conducted surveys of selected business services industries in respect of the 1995-96 financial year. The industries covered were legal, accounting, consultant engineering, real estate agents and computer services.

This publication presents statistics for both the legal and accounting services industries.

Information in this publication was collected in a survey of businesses classified to Group 784 of the 1993 edition of the Australian and New Zealand Standard Industrial Classification (ANZSIC). This group comprises two Classes: 7841 Legal Servcies, which includes all businesses mainly engaged in providing legal services and 7842 Accounting Services, which includes all businesses mainly engaged in providing accounting, bookkeeping and auditing services.

This is the third time the ABS has surveyed the legal and accounting services industries. Surveys were previously conducted in respect of the 1992-93 and 1987-88 financial years, and statistics were released in the publications Legal and Accounting Services, Australia, 1992-93 (Cat. no. 8678.0), Legal Services Industry, Australia, 1987-88 (Cat. no. 8667.0), and Accounting Services Industry, Australia, 1987-88 (Cat. No. 8668.0).

Results from the other business services collections have been released in the following publications:

  • Real Estate Agents Industry, Australia, 1995-96 (cat. no. 8663.0);
  • Computing Services Industry, Australia, 1995-96 (cat. no. 8669.0); and
  • Consultant Engineering Services, Australia, 1995-96 (cat. no. 8693.0).

These publications contain a selection of the information available from the surveys. More detailed information is available from the ABS on request.

The ABS is committed to providing more information on the priority service industries sector of the economy. However, the breadth of activities encompassed in the sector poses the problem of selecting which industries to include. To this end the ABS welcomes comments and suggestions from users recommending industries and data items for inclusion in future surveys. These comments should be addressed to:


    The Director,
    Service Industries Surveys,
    PO Box 10, Belconnen, ACT, 2616.
ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated: without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.


Dennis Trewin
Acting Australian Statistician

LEGAL SERVICES, MAIN FEATURES
Introduction
This section of the publication presents results in respect of the 1995-96 financial year of a survey of businesses in the legal services industry. The legal services industry includes barristers, solicitors, and other businesses whose primary activity is the provision of legal services such as patent attorneys, legal aid services, conveyancing services (provided by units of qualified legal practitioners) and notaries.

A legal practice
Many legal practices are conducted via a single entity (e.g. a solicitor or barrister practising as a sole practitioner or solicitors practising in partnership). Other practices are conducted via more than one entity, i.e. a legal firm and a service entity.

For the purposes of this survey, where a practice was conducted via a legal firm and a service entity, these entities were consolidated and treated as one practice if the service entity provided resources to a single legal firm only. Where a service entity provided services to more than one legal firm, the service entity has been excluded from the data in this publication.

Size of industry
At 30 June 1996, there were 9,796 practices in the legal services industry. This represented an increase of 11% in the three-year period since June 1993. In that period the number of solicitor practices had increased by 15% from 5,579 at the end of June 1993 to 6,403 practices at the end of June 1996. In contrast, barrister practices had increased by only 5%, from 3,184 at the end of June 1993 to 3,350 at the end of June 1996.

Practice size
In terms of total employment, most (95%) practices were small, employing fewer than 20 persons. However, these practices accounted for only 54% of the total employment and contributed 46% of the total income of the industry.

There were 64 practices with employment of 100 or more persons. Although these practices accounted for less than 1% of the number of practices, they accounted for significant proportions of total employment (21%) and total income (30%).

Employment
There were 67,494 persons employed in the legal services industry at 30 June 1996. Full-time employment accounted for 81% of employment. The employment in the industry at 30 June 1996 represented a 7% increase since June 1993.
The number of working principals of legal firms increased by 5% in the three years to June 1996. However, the number of other qualified employees increased 28% in the three-year period. In contrast the number of other employees, i.e. support staff, increased only marginally (3%) over the period. At 30 June 1996, females accounted for 60% of employment in the industry. However, only 16% of principals and 41% of other qualified employees were female.

Income
The 9,796 practices in the legal services industry generated $5,590.9 million in income in 1995-96. Commercial, finance and business services legal work was the major source (32%) of income, accounting for $1,784.7 million. This was the same proportion as recorded in 1992-93. The other major source of income was property coveyancing, which accounted for 12% of income in 1995-96, down from 15% in 1992-93.

Labour costs
Labour costs were the major expense incurred by legal practices in 1995-96 and accounted for 49% of expenses. In 1992-93 labour costs accounted for 45% of expenses. The increase reflects the large increase in the numbers of employed qualified persons.

Profitability
The legal services industry recorded an operating profit before tax of $1,750.4 million in 1995-96. This represented an operating profit margin of 31.5% which was down marginally on the 32.6% recorded in 1992-93.

State dimension
New South Wales and the Australian Capital Territory combined accounted for 41% of practices in the legal services industry. They were responsible for 41% of total employment and 45% of total income. Victoria was the next greatest contributor, accounting for 30% of practices, 26% of employment and 25% of income.
Relative contributions by State to key aggregates remained similar to 1992-93.


Legal Services, Key Figures
Data item
1992-93
1995-96
Practices at end June (no.)
Solicitors (no.)
5 579
6 403
Barristers (no.)
3 184
3 350
Other (no.)
87
43
Total (no.)
8 850
9 796
Employment at end June
Working principals and partners (no.)
n.a.
15 503
Principals of service entities (no.)
n.a.
914
Total (no.)
15 606
16 417
Other qualified employees (no.)
9 059
11 554
Other employees (no.)
38 442
39 523
Total (no.)
47 501
51 076
Total (no.)
63 108
67 494
Income
Income from legal services ($m)
4 722.3
5 255.8
Other income ($m)
421.7
335.1
Total ($m)
5144.0
5 590.9
Expenses
Labour costs ($m)
1 562.4
1 906.2
Rent, leasing and hiring expenses ($m)
493.0
448.8
Other expenses ($m)
1 423.0
1 561.6
Total ($m)
3 478.4
3 916.5
Operating profit before tax ($m)
1 655.5
1 750.4
Operating profit margin (%)
32.6
31.5
Industry gross product ($m)
3 607.2
4110.9
ACCOUNTING SERVICES, MAIN FEATURES

Introduction
This section of the publication presents results in respect of the 1995-96 financial year of a survey of businesses in the accounting services industry. The accounting services industry includes units whose primary activity is the provision of accounting, auditing or bookkeeping services.

An accounting practice
Many accounting practices are conducted via a single entity (e.g. an accountant practising as a sole practitioner or accountants practising in partnership). Other practices are conducted via more than one entity i.e. an accounting firm and a service entity.
For the purposes of this survey, where a practice was conducted via an accounting firm and a service entity, these entities were consolidated and treated as one practice if the service entity provided resources to a single accounting firm only. Where a service entity provided services to more than one accounting firm, the service entity has been excluded from the data in this publication.

Size of industry
At 30 June 1996, there were 8,389 practices in the accounting services industry. These practices had employment of 66,792 persons and generated $4,939.1 million in total income.

Practice size
In terms of total employment, most (95%) practices were small, employing fewer than 20 persons. However, these practices accounted for only 56% of the total employment and contributed 42% of the total income of the industry.
There were 18 practices with employment of 100 or more persons. Although these practices accounted for less than 1% of the number of practices, they accounted for significant proportions of total employment (26%) and total income (39%).

Employment
There were 66,792 persons employed in the accounting services industry at June 1996. The majority (83%) of employment was on a full-time basis. The employment in the industry at 30 June 1996 represented an 11% increase since June 1993.
The number of working principals of accounting firms increased by 9% in the three years to June 1996, while the number of other qualified accountants as employees increased 22% in the three-year period. In contrast, the number of other employees (i.e. support staff) increased by only 6% over the period.
At 30 June 1996, females accounted for 51% of employment in the industry, an increase from the 48% recorded in 1993. However, only 17% of principals and 41% of other qualified employees were female.

Income
The 8,389 practices in the accounting services industry generated $4,939.1 million in income in 1995-96. Taxation (32%), general business and personal accounting (27%) and auditing (18%) were the three main sources of income. The proportions recorded in 1995-96 for these fields of accounting services were similar to those recorded in 1992-93.

Labour costs
Labour costs were the major expense incurred by accounting practices in 1995-96 and accounted for 56% of expenses. In 1992-93 labour costs accounted for 52% of expenses. The increase reflects the large increase in the numbers of employed accountants.

Profitability
The accounting services industry recorded an operating profit before tax of $954.6 million in 1995-96. This represented an operating profit margin of 19.4%, which was down marginally on the 20.5% recorded in 1992-93.

State dimension
The accounting services industry was concentrated in the two largest States, New South Wales and Victoria. Accounting firms in these two States accounted for 65% of total employment and 69% of total income. The relative contributions by each of the States have not changed significantly since 1992-93.
Accounting Services, Key Figures
Data item
1992-93
1995-96
Practices at end June (no.)
8 699(a)
8 389
Employment at end June
Working principals and partners (no.)
n.a.
14 487
Principals of service entities (no.)
n.a.
923
Total (no.)
14 143
15 409
Other qualified employees (no.)
18 277
22 207
Other employees (no.)
27 580
29 175
Total (no.)
45 857
51 382
Total (no.)
60 000
66 792
Income
Income from accounting services ($m)
3 713.4
4 407.2
Income from management consulting and computer consulting services ($m)
218.3
371.1
Other income ($m)
154.7
160.8
Total ($m)
4 086.4
4 939.1
Expenses
Labour costs ($m)
1 690.0
2 255.5
Rent, leasing and hiring expenses ($m)
358.9
390.4
Other expenses ($m)
1 209.0
1 375.2
Total ($m)
3 257.9
4 021.1
Operating profit before tax ($m)
828.6
954.6
Operating profit margin (%)
20.5
19.4
Industry gross product ($m)
2 828.7
3 592.4
(a) Counts of practices are not directly comparable between 1992-93 and 1995-96.


SYMBOLS AND OTHER USAGES
ABSAustralian Bureau of Statistics
ANZSICAustralian and New Zealand Standard Industrial Classification
n.a.not available
n.p.not available for publication but included in totals where applicable
RSErelative standard error
*subject to sampling variability too high for most practical purposes
**subject to sampling variability too high for practical purposes
. .not applicable
nil or rounded to zero
Where figures have been rounded discrepancies may occur between the sum of component items and the total.


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