Confidence among law firms about their financial prospects is ‘surprisingly high’, an annual snapshot of the sector has revealed, with one third believing the pandemic will increase their workload in both the short and long term.
The 2020 LexisNexis Bellwether Report, based on analysis of small firms and small offices of larger firms, paints as different picture to research earlier in the crisis. However while the market is ’more confident than might be expected’, concerns remain. One is cash flow, with almost half - 44% - worried that they do not have the cash flow to meet their current costs.
Firms are markedly more pessimistic about their clients’ prospects than their own, with 38% seeing the pandemic as a 'critical threat'.
To cope, firms have cut staff hours, cancelled subscriptions and delayed investments, the survey finds. So far, however, only 4% of firms have needed to make redundancies. Only 18% said they had delayed planned investment, or cut bonuses; 16% said they had reduced salaries; 14% had taken on debt.
However as the government’s furlough scheme starts to taper and ends in October, job losses could rise - but only 17% of firms believe it will be a necessary step.
’Fewer firms are in distress than many would have feared,’ the report observes. 'This is a starkly different picture to other surveys of the legal market, including The Law Society and Bar Council.'
The LexisNexis report is based on 15 in-depth interviews and online surveys completed by more than 150 solicitors in small firms and small offices of larger firms across England and Wales. The research fieldwork was independently conducted, concluding in April 2020.
*The Law Society is keeping the coronavirus situation under review and monitoring the advice it receives from the Foreign & Commonwealth Office and Public Health England.