Profession
Confidence within the legal profession about the forthcoming years’ business has plummeted.
Independent research, carried out on behalf of accountancy and professional services firm Smith & Williamson, found a 27% drop in levels of confidence compared with the same survey in 2006. Of those that responded, three quarters felt that the economy was a key issue for the legal market.
Giles Murphy, head of assurance and business services at Smith & Williamson, says that evidence in 2007 suggested that confidence was beginning to wane but was nowhere near as dramatic as the latest results suggest. “The service sector has been one of the success stories of the UK over the last few years but we are undoubtedly entering a different phase of the economic cycle with a more uncertain future for the sector.”
Murphy now says that the economy is taking a downturn and he expects the number of defensive mergers in the year ahead to increase. “In reality, when firms are doing well, the desire to do even better is often not strong enough to outweigh any perceived risks surrounding merger. In good times, merging two strong complementary practices can build ‘super firms’. Clearly the risk of merger in the current market is that the opposite occurs.”
