9th Annual Survey of Irish Law Firms

This is our 9th annual survey of law firms in Ireland but this edition comes amid a worldwide pandemic. The resulting economic crisis has forced firms to adapt at speed, putting in place strategies to manage and mitigate the effects of repeated business disruption. Our report shows that most have maintained service levels to clients but only a fraction have been able to sustain revenues at pre-pandemic levels.

 

Key findings of our latest law firm survey

For some years, the legal sector has contended with familiar concerns – the war for talent, Brexit, fee pressure and technological adoption. These have not disappeared but, in the short-term, the pandemic has absorbed the majority of law firms’ resources and attention.

In general, law firms have been able to adjust their working practices during the crisis and sustain service levels to clients. However, that is not to underestimate the profound effect on their revenues and cash flow - 40% of all firms we surveyed have seen their revenues decline by more than 20% in the last twelve months. Many have been forced to accept government support to stave off a cash crunch.

In spite of encouraging news on vaccines, there is no immediate improvement in prospect: 80% of law firms have seen a significant decline in sentiment for the sector over the last year and 72% see this continuing for the next twelve months.

It has also slowed activity elsewhere. There continues to be low levels of merger and acquisition activity in the Irish marketplace, for example. This may change as more firms adopt the LLP structure but - for the time being, at least - M&A activity tends to be limited to UK firms seeking to enter the Irish marketplace or smaller deals focused on succession. Equally, enabling remote working has absorbed much of the technology capacity and priority, perhaps preventing larger-scale projects in other areas.

Concerns over Brexit have fallen down the list of priorities: only 30% of respondents to our survey ranked Brexit among the top three key issues facing the sector over the next three years, down from 43% last year. However, there are still fears. With talks still ongoing and no tangible progress on a trade deal at the time of writing, 60% of the Top 20 firms cited a no-trade-deal Brexit as a threat to levels of business in the long-term vs 47% in 2019.

As 2021 approaches, there remains considerable uncertainty about the future. Even with the impact of the pandemic diminishing, plenty of challenges remain – from Brexit to fee pressure. The pandemic has hit some firms particularly hard and may widen the gap between technology-enabled larger players and under-invested smaller practices. Be in no doubt: this is a precarious moment for the sector.

 

Get in touch

 

Paul  Wyse 's Profile Photo

Paul Wyse

Managing director, Transaction Services

Transactions
Dublin (Sandyford)
Marc  Lowry 's Profile Photo

Marc Lowry

Head of Business Development

Business development
Dublin (Sandyford)



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