Reduction in new business due to COVID-19

Over a third of solicitors and just under half of non-solicitors working in Scottish legal firms have been placed on furlough as the legal profession looks to how it can manage through the financial downturn caused by the coronavirus outbreak.

The results of a survey undertaken by the Law Society of Scotland with senior solicitors working in private practice shows that the profession has been hit hard. 90% of firms contacted report seeing a fall in new business. Reduced turnover and reduced cashflow is also a challenge for between 80 and 90% of respondents.

Respondents have also adopted broadly similar strategies, with almost all respondents reporting making use of the UK Government’s job retention scheme to furlough both solicitor and non-solicitor employees. Based on the sample of firms contacted it appears as though 35% of Scottish solicitors and 41% of non-solicitors working in private practice in the legal profession have been placed on furlough.

Analysis of the responses shows that the impact is evenly spread across Scotland with both rural and urban solicitors reporting similar issues.
The survey of over 150 law firms was undertaken in late April/early May as part of the Society’s work to understand the impact the coronavirus outbreak is having on members.

John Mulholland, President of the Law Society of Scotland, said: “Along with most business sectors in Scotland the restrictions put in place to manage the coronavirus outbreak are having a real impact. While the UK Government’s job retention scheme has allowed firms to use this as an option to reduce costs while retaining staff, almost 60% of firms surveyed have introduced a recruitment freeze. Business growth and a return to normal staff turnover will be an important part of ensuring the recruitment and retention of talent within the profession.

“A strong legal profession is vital to the recovery of the Scottish economy. We have used, and will continue to use, the results of this survey to show the UK and Scottish governments that more help is needed to get business moving and support the legal profession in Scotland.”

To support the Scottish legal profession during the coronavirus outbreak the Law Society has been engaging with the government and other key stakeholders to emphasise the ways in which solicitors have been impacted. This has included working to influence legislation, policies and operational protocols which directly impact on our members, trying to ensure that legal practitioners can continue to work in a way which is in keeping with public health guidance.

At the end of April the Society also announced a £2.2 million financial support package which will reduce fees for all practising solicitors and firms in recognition of the challenging circumstances they are facing.