The annual Smith & Williamson law firm survey 2018 obtained the opinions of over 130 managing partners and senior management personnel across the UK in August 2018. The clear message emerging from this year’s survey show that law firms are continuing to fight for top talent in a competitive market but are increasingly confident about the opportunities available, despite the uncertainties ahead. Highlights include:
Brexit
- There is a palpable sense of uncertainty with 33% of respondents now reporting they are not sure whether Brexit will be an opportunity or a threat to their business
Recruitment and Human Resources
- The last twelve months has seen almost a doubling in the number of lateral hires taking place with, once again, the US law firms in London leading the way
- Law firms are also beginning to see significant personnel changes outside of traditional legal positions with a new breed of tech-savvy, legal-minded roles emerging
- Firms are starting to recruit heads of innovation and create teams of legal project managers to ensure smoother delivery of client work to time and budget
Technology and innovation
- For the second year in a row, technology has ranked as the number one opportunity for firms overall, showing an emerging trend of the importance of legal technology
- There is continued investment in cybersecurity as the legal market strives to ensure confidential client materials remain secure
- Other areas of investment appear to concentrate on operational activities rather than the ground-breaking AI solutions that have been talked about
Financial management
- When asked to outline the sources of funding firms plan to increase over the next three years, the most frequent response was the improvement in lock-up, with bank funding the second most frequent and partners’ capital ranked as the third choice for future funding. It should also be noted that the use of partners’ capital was the most popular second choice across all firms in the survey
- 43% of respondents said they had begun to include lock-up performance as part of their formal performance assessment activities
Growth strategies
- 59% of firms said they had no plans to expand in the next 12 months but a significant number of firms (36%) said they would be looking to expand within the UK over this timeframe
- As in previous years, a focus on specialist sectors is seen as the biggest opportunity for respondents as they recognise the importance of differentiating themselves in the market. 40% of firms said a focus on specialist sectors was their first choice for investment, in contrast to 15% of firms selecting investment in technology as their first choice
- Around 40% of firms responding indicated they would be looking to expand geographically in the next twelve months but, quite surprisingly, given our imminent departure from the EU, most of these firms were seeking expansion within the UK
- 74% of respondents reporting they expect to face a slight or significant increase in competition over the next twelve months
http://smithandwilliamson.com/en/insights/law-firm-survey-2018
