Law firm survey 2020

Now in its twenty-sixth year, our 2020 law firm survey, developed in association with The Lawyer, reveals many law firms were ill-prepared for the seismic shock from the coronavirus outbreak. The crisis has cast an uncomfortable light on firms with poor financial management or without the necessary technology infrastructure. The pandemic already appears to be widening the gap between law firms, with some now under real pressure. The survey was carried out across May and June 2020 and completed by 198 managing partners and senior management personnel across the UK.

Key findings of our latest law firm survey

 

Heading into this crisis, law firms were feeling confident: revenues were up, margins were stable and around four-fifths were optimistic about the year ahead. The coronavirus has changed all that. Many law firms were forced to furlough staff and are now contemplating an uncertain future.

Competitive pressure has been a fact of life for law firms in recent years: they must now compete with some accountancy firms as well as each other to hire the best staff. This has seen significant wage inflation, which in turn has stifled margin improvement. At the same time, there is greater competition for work, which puts additional pressure on fees.

From here, those firms that have invested in technology, managed lock-up successfully and, perhaps most importantly, are in the right areas for the post-coronavirus world are likely to steal a march. Expect areas such as bankruptcy and litigation to forge ahead, while other segments, such as real estate, to struggle.

Respondents say the legal industry is battening down the hatches for the foreseeable future. That means M&A and team hiring may be off the table in the short-term. That said, those firms with greater vision may spot the opportunity to pick-up high-quality lawyers at a time when they may be disillusioned.

Last year, we warned that the slow progress on lock-up could pose a real threat to firms in a crisis. Today, we are in the white heat of a crisis and the end of the transition agreement is just around the corner. Firms may now be regretting they didn’t do more to build resilience into their businesses when times were good.

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Giles Murphy's Profile Photo

Giles Murphy

Head of Professional Practices

Assurance and accounting
London



Meeting the challenges

Competitive pressure

Competitive pressure

The legal landscape

Business direction

Business direction

Digital transformation and the ‘new normal’

Lock-up

Lock-up

The importance of cash

The impact of the pandemic

The impact of the pandemic

Unprecedented Government support

The end of the office?

The end of the office?

Working from home

 

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Giles Murphy's Profile Photo

Giles Murphy

Head of Professional Practices

Assurance and accounting
London

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