Lawyers were in bullish mood, with 93% expressing confidence in their firm’s future. In total, about three-quarters of firms reported financial performance at or better than expectations despite national restrictions and market uncertainty, while 31% of firms had outperformed profit expectations since the start of the pandemic.
The report, ‘Small law in the pandemic: the good, the bad and the new’, was published this week by LexisNexis Legal & Professional. It was compiled from in-depth interviews with lawyers in small or medium-sized firms as well as online surveys completed by more than 300 solicitors in May-June 2021.
Two-thirds said their firm is growing, compared to three-four years ago. Many firms reported growing and diversifying practice areas quickly and easily by acquiring staff that had been laid off by other firms. Unlike larger firms, small firms plan to grow organically rather than resort to high-risk mergers and acquisitions.
The average job satisfaction rating was eight out of ten, although the average stress level was seven out of ten.
And while some 39% took out government-backed, pandemic-specific debts, 45% didn’t. Of those that used the furlough scheme, most don’t intend to pay the money back despite achieving strong revenue.
However, some practice areas fared better than others, with private practice doing well and commercial property practices struggling at some firms. 70% of lawyers predict challenges ahead including the rocketing cost of Professional Indemnity Insurance (PII) premiums―two-thirds of respondents cited PII as the biggest threat to their business―and adapting to the changing workplace and expectations from employees, with no clear consensus yet emerging about the future of hybrid working.
Chris O’Connor, LexisNexis director of solutions, commented: “It has been a tough slog for law firms through the pandemic, with many depending on government grants and furlough to survive.
‘So, it is excellent to see the strong growth trajectory in the market. But, with stress and wellbeing continuing to be a challenge―it is clearly crucial for firms to identify the root cause and seek to invest in solutions that will help to mitigate it.’
