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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).

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.

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.

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

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