Law firms: facing the pandemic head on

We have analysed the latest set of filed accounts for the top 50 UK law firms for the year 2019-20, as the legal profession entered its toughest challenge in a generation. Together with Law.com International, we look at the financial strength of the sector through a turbulent time.

The pandemic presented law firms with their greatest challenge in a generation. For the most part, our analysis, compiled with Law.Com International, of the latest set of filed accounts for the top 50 UK law firms for 2019-20 suggests that despite the pandemic arriving only just prior to their year ends, they were impacted.

In the first few precarious months, law firms acted quickly to preserve cash, improving their debtor days, negotiating with banks and cutting partner distributions.

However, with revenues of £19.5bn should the sector have been better prepared and less reliant upon government support to avert an even deeper challenge. There are undoubtedly lessons the sector can draw from the crisis.

 

 

Insights and analysis

Performance: slowing revenue growth and rising costs saw law firms ill-prepared for a crisis

Performance: slowing revenue growth and rising costs saw law firms ill-prepared for a crisis

In common with many sectors, law firms were caught by surprise when the pandemic hit the UK in March 2020. Many went into the pandemic with slowing revenue growth and high cost bases, a tough starting point to face down a once-in-a-generation crisis.

Financial strength: law firms raced to preserve cash as pandemic hit

Financial strength: law firms raced to preserve cash as pandemic hit

In common with many other sectors, law firms faced a potential cash crunch from the Covid crisis. The early part of the pandemic saw law firms take drastic action to shore up their cash positions in the face of sliding revenues.

Surviving the pandemic: law firms have weathered the storm

Surviving the pandemic: law firms have weathered the storm

The majority of UK law firms have a March or April year end, so we can now access information on their performance and financial strength for the year to 30 March/April 2020 of the top 50 firms, just as the pandemic started significantly to impact everyone’s lives.

 

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Giles Murphy's Profile Photo

Giles Murphy

Head of Professional Practices

Assurance and accounting
London



 

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Giles Murphy's Profile Photo

Giles Murphy

Head of Professional Practices

Assurance and accounting
London

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