Insights

Smith & Williamson’s 8th Annual Survey of Irish Law Firms 2019/20

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  • Published: Mon, 25 Nov 2019 07:00 GMT

Confidence dips dramatically for the legal sector against a backdrop of Brexit, international trade difficulties and economic uncertainty

Entry by international and UK firms into the Irish market continues to drive salary inflation

A report published today (Monday 26th November) by accountancy and professional services firm Smith & Williamson has found that confidence in the legal sector has dipped dramatically in the past twelve months.

According to the results of Smith & Williamson’s 8th Annual Survey of Irish Law Firms 2019/20, only 19% of all firms and none of the Top 20 largest firms believe the legal sector will see an improved outlook in 2020. This is down from over 40% in 2018.

Although confidence has dropped, profits and revenues continue to increase in more than half of firms despite continuing salary inflation, increasing operating costs and downward pressure on fees. Revenues continue to grow in most firms while profits increased in over half of all firms and two in three of the Top 20.

Commenting on the findings of the survey, Smith & Williamson Professional Services Managing Director, Paul Wyse, said: “Our eighth annual survey is, as always, a vital benchmarking tool for the sector and this year’s edition is no exception. The findings highlight a substantial drop in confidence for the year ahead due to a squeeze on margins, continuing tough competition for talent and a negative economic outlook. Despite this drop in confidence and continuing inflation beating salary increases, Irish legal firms continue to perform well across the key metrics of revenue, profits and staff numbers all of which are up year on year.”

Paul Wyse added: “Attracting and retaining talented solicitors continues to be a key issue. The arrival of UK and international firms to the market either through merger or greenfield setup is driving competition for talent. Lateral hires of individuals and teams is an increasing concern and it is driving significant salary inflation for incumbents. In addition 65% of legal firms believe the level of competition has increased in the past year with consequent downward pressure on fees, having a significant impact on nearly a third of firms.”

The survey indicates that 38% of all firms and 67% of Top 20 firms believe attracting and retaining talent is the key issues facing their firm. This has led to significant pay increases which continue to outstrip inflation, with 42% of all firms awarding pay increases of over 6% in the past twelve months. In addition, firms are becoming more diverse and this year the survey looked at the representation of women in legal firms. For firms participating in the survey women make up 55% of all qualified solicitors, 35% of all equity partners and 35% of salaried partners in Irish legal firms.

Nearly two in three firms participating in the survey indicate they will adopt the new LLP structure recently brought into effect by Minister Flanagan and the LSRA. Paul Wyse commented; “With the first authorisations by the LSRA imminent we believe this will act as a precursor and facilitator of consolidation within the legal sector and that mergers or acquisition may become increasingly attractive”

Smith & Williamson’s Annual Survey of Irish Law Firms, now in its eighth year, is an annual study of the Irish legal sector and has been running since 2011. The survey was conducted by Amárach Research during autumn 2019 and canvassed the opinions of 120 large, mid-tier and small law firms across Ireland.

Download 8th Annual Survey of Irish Law Firms 2019/20

 

Notes to Editors

About Smith & Williamson

Smith & Williamson is an independently-owned, financial and professional services group. The firm is a leading provider of investment management, financial advisory and accountancy services to private clients, professional practices, entrepreneurs and mid-to-large corporates. The group’s 1,750 staff and partners operate from a network of twelve offices: London, Belfast, Birmingham, Bristol, Cheltenham, Dublin (City and Sandyford), Glasgow, Guildford, Jersey, Salisbury and Southampton.

Earlier this year, Smith & Williamson produced the 2018 Smith & Williamson UK Law Firm Survey, developed in association with The Lawyer magazine, which examined the UK legal landscape. It showed that addressing the competitive landscape, rather than Brexit, remains the top priority for elite legal firms in the UK.

Contact:

Paul Allen
Paul Allen & Associates
18 Fitzwilliam Square South, Dublin 2
01 676 9575 / 087 257 5700

Rory Sweeney
Paul Allen & Associates
18 Fitzwilliam Square South, Dublin 2
01 676 9575 / 086 897 6442

Smith & Williamson Freaney Limited
Authorised to carry on investment business by the Institute of Chartered Accountants in Ireland. A member of Nexia International.

Smith & Williamson Freaney Audit Company
Registered to carry on audit work and authorised to carry on investment business by the Institute of Chartered Accountants in Ireland.

Smith & Williamson Holdings Limited
Registered in England at 25 Moorgate, London EC2R 6AY. No. 4533948.

Disclaimer

By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.