Law Society survey underlines challenges facing members
May 18 2010 by Henryk Zientek, Huddersfield Daily Examiner
YORKSHIRE law firms are pessimistic about prospects for expanding their businesses in 2010, says a new survey.
Findings from the Law Society show that law firms across the region expect to see little or no growth this year – while the challenging industry environment has caused many of them to review their workforce and change their way of operating.
The survey, sponsored by Lloyds TSB Commercial, showed that net profit per equity partner fell by 24% in 2009 against the previous year. This corresponded with a near-9% reduction in staffing levels.
Craig Bennett, senior manager for specialist markets at Lloyds TSB Commercial in Yorkshire, said: “Turbulent economic conditions and the regulatory and competitive changes contained in the Legal Services Act have combined to redefine the legal landscape. This presents a number of challenges and opportunities.
“There is no doubt legal firms have seen difficult conditions in 2009. However, this looks to be improving with the majority predicting a broadly static year in 2010.
“In response to these challenging economic conditions and an evolving regulatory environment many firms have adopted slimmer business models, paving the way for a return to better fortunes in the current year.”
Mr Bennett said Lloyds TSB Commercial had increased lending to the legal sector by 6% year-on-year, adding: “We want our solicitor customers to be ready to benefit from the upturn.”
Among other findings, the survey showed a 6.5% fall in median practice fee income last year and noted that short-time working had been adopted by many firms.