25 Nov 2019 | 04.35 pm
Commercial Law Firms Fret About 2020 Outlook
Smith & Williamson report on the sector
25 Nov 2019 | 04.35 pm
Confidence across Ireland’s commercial law sector has dipped sharply in the past year, according to Smith & Williamson.
S&W’s Survey of Irish Law Firms 2019/20 finds that only one in five law firms and none of the Top 20 largest firms believe the legal sector will see an improved outlook in 2020.
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.
The report also finds that women make up 55% of all qualified solicitors and one-third of equity partners.
Paul Wyse, MD of Smith & Williamson Professional Services, commented: “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, 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.
“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, two-thirds 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.”
Nearly two in three firms participating in the survey indicate they will adopt the new Limited Liability Partnership (LLP) structure recently brought into effect.
“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,” Wyse added.
The survey, conducted by Amárach Research, canvassed the opinions of 120 large, mid-tier and small law firms across Ireland.
Photo: Paul Wyse (centre) with Brian Doherty from LSRA (left) and Giles Murphy. (Pic: Maxwells)