From April 2027, a major shift in corporate transparency will reshape how law firms and all limited companies and LLPs present themselves to the world. Under the Economic Crime and Corporate Transparency Act (ECCTA), these businesses will be legally required to file full profit and loss (P&L) accounts with Companies House.
Even small and micro firms that have previously filed only abbreviated accounts will no longer be able to keep their financial performance private. The government’s goal is to crack down on fraud, improve trust in the corporate system and level the playing field through public access to basic financial information. And the implications go well beyond compliance.
Why this matters for law firms
Roughly 75% of UK law firms are incorporated as limited companies or LLPs. Up until now, many of these firms have been able to operate under a cloak of financial privacy, leveraging reporting methods that offered minimal transparency to clients, competitors, and even staff.
- Profitability will be on display. Firms that appear dominant through PR or brand positioning may now have to prove they are genuinely successful, not simply propped up by optimistic work-in-progress valuations or interest income.
- Reputation and recruitment will shift. Transparency will influence how firms are perceived by potential hires and clients. This could expose firms that have relied on an inflated image and empower leaner firms that consistently deliver core legal value.
- Staff demands may increase. If high profits are revealed, employees may reasonably expect higher pay. If the numbers are weak, staff retention could become a new pressure point.
What law firms need to do now
This isn’t just about compliance. It’s also about strategic readiness. And law firms should act sooner rather than later.
Know your classification
Are you a micro-entity or small company? The thresholds are:
- Micro-entity: Less than £1m turnover, less than £500k on the balance sheet, less than 10 employees
- Small company: Less than £15m turnover, less than £7.5m balance sheet, less than 50 employees
Plan around your financial year
If your accounting year ends early in 2027, it might be possible to file before April 1 and delay the impact of these new requirements by a year.
Audit your numbers
Ensure your financial data is accurate, consistent, and realistic. Accounting must reflect actual profitability and not just optimistic forecasting.
Think about your messaging
If you’re asked about a tough year or a standout performance, you need to be able to explain it to staff, clients and regulators.
Get help to get the numbers right
You don’t need to tackle this alone. Tools like Omnitrack’s Legal Compliance Suite can help law firms calculate and present their financial figures correctly and ensure your accounts are prepared for public scrutiny. Omnitrack is built to help firms navigate complex reporting environments.
Transparency is coming. Get ready
The publication of P&L accounts isn’t just a tick-box exercise. It’s a fundamental change in how law firms present themselves to the outside world. For some firms, this could be a real opportunity to demonstrate strong financial performance and attract top talent. For others, it will require uncomfortable conversations and a rethinking of strategy. Whichever side you’re on, now is the time to prepare, build financial clarity and equip your firm with the tools to stay in control.
Need help crunching the numbers and preparing for ECCTA changes?
Talk to us about Omnitrack’s Legal Compliance Suite to learn how we can support your law firm with one centralised portal to manage all of your critical compliance processes. Designed with leading law firms, the platform can seamlessly adapt to each firm’s specific workflow with customised reporting. Forget spreadsheets, manual processes, and inflexible reporting: stress-free legal compliance is here.
