Law firms have seen a U-shaped recovery – and in some work-types, V-shaped – “rather than a dreaded L-type situation where things stay down in the dumps for a long period of time”, the latest research has said.
Last month saw firms reporting an increase in new enquiries, file openings, chargeable hours, billing, and cash – as well as profit, with billings up and costs down.
“From struggle comes strength – costs are hugely under control, cash is centre stage, profit margins are protected, and teams have bonded.”
Law firm consultant Simon McCrum – former managing partner of Darbys – has been tracking the impact of the coronavirus through a series of qualitative surveys, initially weekly and then at month-ends.
Twenty firms, from large to small, took part in the July survey, the eighth and last of the series. You can read our stories on the previous surveys here.
They reported that residential conveyancing was extremely busy, while it was transactional departments like corporate and commercial property that were still slow.
Firms said government support has helped a great deal, with those that have coronavirus business interruption loans yet to dip into the money – one firm said it may apply for a loan so as to use it to pay the deferred VAT payment next March “just to spread payments whilst it’s interest free”.
Working from home seems likely to continue for most firms – in combination with days in the office – with some firms concerned about lower productivity among home workers.
“We think that productivity and the generation of new ideas and new business is best done from the office,” wrote one managing partner. “The profession has a duty to support local businesses. Home working will destroy the economy.”
Morale was seen as good and most of the firms were not looking at redundancies.
Mr McCrum said: “Law firms have come a long way in a short time. They responded like the profession has never done before so they lived to fight another day.
“That fighting carried on and instead of wondering whether they’ll make it through the month, law firms are now wondering where they might go.
“Clients are back with a vengeance – and streamlined, smooth-running, high tech, and higher-margin law firms are ready, willing and able to service their needs in a new world.”
Mr McCrum advised firms to carry on in this vein, “absent a catastrophic return to national or local lockdown.
He argued that firms should remain focused on the “simple stuff” – charge a good price for a good service, give files the time they need, record time properly and bill all of it.
“This is the way to the stars – far more than any mergers or awards or chains of national or international offices could ever be. Indeed, to focus on these ‘shiny’ things without getting the engine firing all cylinders first, can bring pain rather than pleasure.”