Legal sector proving robust, market report finds
The impact on the legal profession of COVID-19 has not been as bad as feared – so far, but firms that do not adapt to the efficiency changes being driven by the lockdown could miss out on the recovery.
Those are among the main findings of the newly published 2020 LexisNexis Bellwether report on the UK legal profession.
"So far, the legal industry has remained remarkably robust", the introduction states. "However, opinions are divided on the long-term impact and the future adoption of more flexible working practices."
Almost half (49%) of firms surveyed anticipate reduced demand for their services in the short term – though 33% have actually seen an increase – but longer term, 30% expect to see an increase due to the virus while only 11% foresee a decline. However 44% are worried about cash flow to meet current costs, and 71% are concerned about having enough work to cover future costs.
The survey was conducted a month or two later than Law Society of England & Wales and Bar Council studies which reported higher levels of pessimism.
Most firms (78%) have taken up at least one of the forms of Government support: 63% have furloughed support staff and 43% fee earners; 28% have taken a small business loan, 20% a business rates holiday and 17% have deferred a tax bill.
Not surprisingly, there has been a big increase in use of technology, particularly remote working tools, but the survey found that while women and younger team members are more likely want to continue home working (WFH) arrangements, the older generation (who tend to make the decisions) are more likely to favour a return to (office-based) business as usual.
However most decision makers recognise some measure of WFH will outlast the crisis. 50% of those surveyed think that their firm is likely to permanently change their WFH policy. This is reflective of what staff want – 53% would like to work from home full or part time in the future.
The whole experience has been highly stressful for more than 60% of individual solicitors, but wellbeing has taken less of a priority. Larger firms performed worse in this respect. However almost half of respondents report that they have seen a greater focus on their mental health in the wake of COVID-19 home working.
The report warns: "Despite the well-understood challenges the industry is facing, relatively few respondents say they would have acted differently had they foreseen the crisis. This stretched our credulity and we fear firms run the risk of confidence slipping into complacency. Those who fail to plan now could be caught out if the crisis prolongs or a second wave hits in the winter."
But it adds: "The legal industry can be proud of its response to the crisis. Firms have made years of progress in a matter of weeks. Whilst the long-term impact of COVID-19 is yet to be seen, firms are taking steps to future-proof themselves. The industry’s confidence may prove warranted after all."