16 Dec 2017 | 12.42 pm
What’s Bothering Ireland’s Commercial Law Firms
Smith & Wiliamson survey of the solicitor business
16 Dec 2017 | 12.42 pm
A major shakeup in the legal sector as a result of Brexit is inevitable, according to the annual Smith & Williamson Survey of Irish Law Firms 2017-2018, which finds that outside the top 20 law firms the overwhelming majority have no Brexit strategy in place yet.
The most striking findings in the survey includes the fact that, even though most top 20 firms do have a Brexit strategy in operation, 97% of non-Top 20 firms do not; and that a large number of UK firms plan to open offices in Dublin after Brexit, with major implications for domestic firms.
The survey lists both as ‘concerns’, but points out that the arrival of UK firms also offers opportunities, with some of the top 20 having already been approached by a UK law firm in the past 12 months with regard to a possible merger, acquisition or strategic representation arrangement.
Other findings include a continuation of steady growth in the sector, with two-thirds of commercial law firms reporting increased revenue growth and profits in the past 12 months. However, top 20 firms are not reporting as much revenue and profit growth in the last 12 months compared to regional firms, which seem at last to be enjoying some of the fruits of the recovery.
Recruiting and retaining staff is an increasing concern for many firms. Competition for talent is intensifying, and salary increases continued to outstrip inflation in the sector with two out of three firms (89% of top 20) reporting pay increases of more than 3% in 2017. Four out of ten firms (over half in the Top 20) have paid average salary increases of more than 5% in the past year.
The key issues in the next year, apart from Brexit, will be:
- Maintaining profitability
- Managing cashflow
- Pressure on fees
- The economy
- Recruitment and retention of staff.
Smith & Williamson managing director Paul Wyse commented: ‘’We are in a period of uncertainty about Brexit, and many law firms are concerned about the impact it will have on their business. Commercial legal practices are finding it increasingly difficult to attract and retain talented staff, and are offering more attractive salaries, flexible working arrangements and benefits as a result.
“Younger solicitors are seeking a better work/life balance and more and more solicitors are moving into in-house and public sector roles. These now make up 20% of all Irish solicitors, up from 12% in 2007. These roles are generally less pressured and have shorter hours.’’
Photo: Paul Wyse (left) with justice minister Charlie Flanagan