After a serious low and a soaring high, business confidence levels have returned to pre‐pandemic levels. Results from our 2022 Bellwether survey revealed 0% of respondents are confident about the future of their firms.
The top threats for 0% of respondents are attracting and retaining talent, followed by attracting new business at 0%.
Remote working isn't holding businesses back, as 0% of respondents revealed that their law firm has adapted well to the challenges of hybrid working.
For ten years now 桔子视频 has been producing its Bellwether report — an annual survey of independent law firms throughout England. Throughout the last decade these reports have offered invaluable insights and guidance and contributed to the discourse on the future of independent law firms.
The 2022 report finds that despite threats of doom and gloom, independent law firms were pleasantly surprised to find the financial repercussions of the pandemic were minimal — with many making a serious profit and have devised ambitious growth plans, with mergers and acquisitions becoming increasingly attractive.
But a new wave of change is on its way and small law firms will need to move quickly in order to stay afloat. Can small law leaders apply what they've learnt in the last 24 months to a new era of transformation? Or will an out-of-the-woods attitude hold them back?
Key Themes
Financial performance — confidence returns to pre-pandemic levels
Results from our 2022 Bellwether survey revealed 91% of respondents are confident about the future of their firms. A lazy conclusion to this change would be that confidence is slipping, but it is more likely the aftermath of the post-lockdown legal boom which saw the UK鈥檚 law firms generate a whopping 拢41.58bn in revenues, compared to annual turnovers of 拢36.78bn in 2020.
Four-fifths of firms say financial expectations have been met.
Mergers and acquisitions — more attractive than previously
Organic growth is the priority for most small law firms, with 65% of respondents revealing that their businesses are planning to grow through organic means in the next five years or so.
When asked about growth through mergers and acquisitions, 16% said this was part of their current growth strategy. In addition, when asked how the pandemic has altered their views on merging or acquiring other firms, a fifth (21%) said it has made it more attractive, compared to only 14% in 2021.
Process and technology — the biggest challenge
Small law firms are thinking big when it comes to tech.
A third (33%) of respondents saying they have already invested in website development while an additional 30% said they plan to invest.
When asked which tech tools are currently in place, perhaps unsurprisingly, teleconferencing had the highest adoption rate at 79%. This was followed by legal research tools at 69%.
Interestingly, a quarter of respondents said they already have online portals for matter status updates and a further 11% said they are planning on introducing it in the next 24 months.
Attracting and retaining talent — the war continues
Two-thirds of respondents said their law firms have invested or plan to invest in more lawyers.
We also asked legal experts how confident they are about competing for talent over the next 24 months. Half (53%) said they are only somewhat confident. 18% expressed doubts about finding the right lawyers.
When asked what they'd look for in a new role, work-life balance was ranked as the most important factor, followed closely by firm reputation.
Driving new business — online channels are growing
The most effective method of generating leads is through referrals — that's according to more than half of the survey respondents who revealed this to be their number source. Another popular method was upselling and cross-selling opportunities. Interestingly, online search and social media were also significant contributors to lead with many firms focussing their efforts here.
Current performance vs. 3-4 years ago
51%
Growing
38%
Stable
5%
Declining
5%
Don鈥檛 know/ prefer not to say
Confidence looking forward
32%
Very
59%
Quite
8%
Not at all
5 year practice plan
81%
Growth
27%
Stability
2%
Downsize
6%
Close/ Retire
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