Annual Law Firm Survey 2022
Emerging from the pandemic – what does the future hold?
The 28th Annual Law Firm Survey, conducted by Evelyn Partners in conjunction with The Lawyer, reveals a sector continuing to thrive amid the significant social and economic challenges of the last few years. We examine the changing landscape of competition, the continuing shifts in working patterns and the views of law firms on the business direction their firm will take in the next 12 months.
The last few years have been characterised by some of the largest social, political and economic upheaval since the Second World War. Law firms emerged from the pandemic in a much stronger financial position than most could have dared hope, but must now contend with a European war, inflation, an energy crisis and a significant economic downturn.
While 93% of law firms we spoke to this year are confident in the business outlook for their firm, they report rising competitive pressures, particularly from international firms. This is most evident in the war for talent, which – after a hiatus during the pandemic – has become increasingly fierce.
Giles Murphy on the Law Firm Survey
Giles Murphy, Head of Professional Practices at Evelyn Partners LLP, discusses the key findings from the Law Firm Survey with Thomas Procter, Head of Research at The Lawyer.
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Basis period reform represents a significant change to the way in which self-employed individuals, including partners in law firms, are subject to UK tax on their income.
Commercial Pressures
Getting paid on time has been an enduring challenge for managing partners, senior partners and finance directors of law firms. Whether it is encouraging accurate time recording, galvanising fee earners to send out invoices, at the right recovery level, and then of course getting clients to pay, the issues are familiar. However, firms are now facing a commercial challenge that most in law firm management won’t have experienced – inflation.
Financial wellbeing
After a brief hiatus during the pandemic, the competition for legal talent has started to heat up once again. Many law firms have simply opened their cheque-books, with newly qualified lawyers now commanding salaries of £100,000 or more. Others have taken a more nuanced approach, trying to offer lawyers a better quality of life in order to recruit and retain them.