Recruitment and retention are by far the biggest issues identified by law firms for the year ahead, according to the latest edition of a regular survey carried out for the Gazette.
Respondents to the survey, undertaken by Andrew Otterburn of the Law Consultancy Network, a group of law firm and chambers consultants, were more likely to cite cashflow as a concern in 2017. Brexit and global political uncertainty are in third place.
The July to December 2016 survey figures are based on responses from 38 firms, of which 17 carried out legal aid work. The average number of partners was 11.
Asked 'What do you see as the top three issues for your firm in 2017?' 19 respondents mentioned recruitment and retention, eight mentioned cashflow. Brexit/global political uncertainty had seven mentions, the same number as improving profitability. Succession planning was mentioned by six and growth by five.
Other issues mentioned included changes in the PI/clinical negligence market, cyber-crime, investment in IT, mergers, integration and accommodation.
On the impact of Brexit, only 10 respondents sid they were 'very' concerned; the same number said 'not at all' while 18 said they were 'slightly' concerned.
Two-thirds of respondents said they had considered the possibility of a merger in the past six months, up from 50% in the January to June survey. Most firms considering merger would prefer to take over an organisation of comparable size or smaller.
Otterburn said: 'It is interesting to see that once again the big issue is recruitment and retention of staff - the key issue for most firms over the last two or three years. Cashflow and profitability is also a major issue and many firms are vulnerable to any slowdown in property, which has boosted income in recent years. It is important that firms build a reasonably strong cash position now, in advance of any potential slowdown.'