Jurisdiction(s):
United Kingdom

Key definition

Benchmark definition

What does Benchmark mean? A benchmark is a reference index or measure used in legal and regulatory documents to assess an investment fund’s performance, set investment constraints or calculate fees. Examples include equity indices such as the FTSE 100; many mandates use customised or composite benchmarks aligned to client objectives (for example, liability‑driven pension benchmarks). Following the UK Myners principles, simple peer‑group comparisons are generally discouraged. In financial regulation the term is also defined in the Benchmarks Regulation (EU) 2016/1011: in the UK as retained EU law (supervised by the FCA) and in Ireland as EU law (supervised by the Central Bank of...

Benchmarking and improving law firm financial performance: fees, expenses, cash flow, lock‑up, rates, realisation, leverage and PEP

Published by a LexisNexis Practice Management expert

Practice notes

This Practice Note sets out a range of approaches for gauging a law firm’s financial performance. It further offers guidance on analysing and benchmarking financial data so that results can be compared with prior years and with competitors. It explains how to interpret trends and set benchmarks for meaningful comparison.

What key aspects of performance need to be measured?

Firms must look at income, expenditure and cash flow together to avoid running out of funds.

Income
Expenditure
Cash flow

This information should be reviewed routinely, at least once a month, and budget holders should monitor the figures for which they are accountable. Regular, at least monthly, reviews are essential.

Fee income

Fee income fluctuates and directly impacts profit. For that reason, fee generation warrants close oversight, ideally month by month. A downward trend in fees can indicate looming difficulties, especially where overheads are static or rising and/or the firm faces greater competition in the market; see Precedent: Fee income monitoring.

Expenses

Expenses, often called overheads, typically remain at similar levels for extended periods in law firms, irrespective of how much work is undertaken. Most major costs are likely to continue at a comparable rate over long stretches, regardless of the amount of work being completed...

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Jon Whittle

Jon Whittle Consulting Ltd

Jon is a specialist in developing legal businesses using market intelligence and customer insight to implement successful programmes for change. He works with law firms to create sustainable growth alongside successful project management, implementing new technologies and evolving business operations. Jon has been working on the future of law firms for more than fifteen years, focusing on the strategies and tactics that help firms build real and defendable competitive advantage. Whilst working in a senior leadership role at LexisNexis he was also the architect and author of the widely read LexisNexis Bellwether Reports and is a recognised authority on how law firms can build and grow. Previously, Jon worked, for two decades, at board level, in some of the UK’s largest media companies, transforming traditional businesses into growth in the digital age. He now applies the fruits of this experience,...

Web page updated on 21/05/2026

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