June 23, 2020
Around two thirds of legal firms plan to review their business structures and processes in the wake of the COVID-19 pandemic, and well over half are planning a major change in strategy. That’s according to a survey of more than 100 law firms of all sizes conducted by accountants and business advisors association MHA. The survey, carried out during lockdown, also claims that 85 percent of firms say the pandemic will have a ‘moderate’ or ‘major’ impact on fee income. Around 59 percent of firms say they will use the opportunity to change their business strategy with a focus on better IT, review of specialisms, and improving profitability.
In addition, nearly two thirds (63 percent) of firms surveyed said they found the transition to homeworking during the pandemic ‘easy’ or ‘very easy’, and 81 percent said they expect to allow staff to work part of the week from home in future.
Karen Hain, head of the Professional Practices team at MHA Moore and Smalley, said: “Like many other sectors, legal firms will be hit financially in the short term by the pandemic, however, there’s also a huge opportunity to use this as a catalyst for modernisation and achieving longer term financial stability. When it comes to business strategy, many firms have been telling us that the pandemic has encouraged them to take action to remove high-risk areas of work and to change their focus from increasing fee income to increasing profitability.
“There’s clearly a huge opportunity around staff recruitment and retention due to the agile working practices we’ve all become used to in a very short space of time. This may enable some firms to staff the business and attract new work without geographic restriction.”
Among the other key findings of the survey were:
- 68 percent are reviewing their current premises requirements or considering smaller offices
- 87 percent of firms have made use of the Coronavirus Job Retention Scheme (CJRS) and 31 percent accessed the Coronavirus Business Interruption Loan Scheme to date
- 68 percent have deferred VAT payments and 31 percent have used the HMRC Time to Pay arrangement
- 66 percent are changing their plans for investment in IT systems and procedures to allow more homeworking
- 61 percent have changed their recruitment plans
- 40 percent said they are changing their plans to focus on credit control and tightening up requests for advance payments on account from clients
Karen added: “This has been a big reset moment for the legal sector and there’s definitely opportunities for those firms who can move quickly to take advantage of new profitable business generated online or from non-traditional routes or regions. Those firms who are looking forwards, taking positive lessons from lockdown, and making decisions to change, based upon a modern IT infrastructure, will be those to profit not just survive.”