Solicitors bullish about future but doubtful about clients’ prospects

Coronavirus: Some law firms thriving

Solicitors are generally bullish about the future, despite nearly one in four believing Covid-19 will harm their clients’ prospects and many predicting lower demand for legal services, an annual survey of small law firms has revealed.

The picture emerging from months of homeworking was mixed, with positives of extra flexibility counter-balanced by negative pressures on senior managers, lower workforce output, and solicitors missing daily face-to-face contact with clients and the buzz of the office

The LexisNexis 2020 Bellwether report also found positive effects for solicitors’ firms flowing from lockdown, such as a new urgency in adopting technology and a greater focus on wellbeing going hand-in-hand with managing a dispersed workforce.

The report, OMG or BAU? [business as usual], found that while some firms were thriving in the new paradigm, others were struggling to survive.

But it said a “surprising” level of optimism was the main takeaway, with some areas of the law actually growing as a result of Covid-19.

The research, based on online surveys completed by more than 150 solicitors and 15 in-depth interviews, said 85% of respondents felt the pandemic was the key challenge facing firms, whereas Brexit had fallen to below 50%.

Confidence was slightly down from last year, but nevertheless robust at almost 80%.

Although clearly some firms were suffering, more than two-thirds planned for growth over the next five years.

But nearly 40% were pessimistic about their clients’ prospects. “Without clients, where is the work?”, the report asked, continuing: “There is no path to recovery without a buoyant consumer and commercial market. Firms need to take a hard look at their sources of revenue before becoming too complacent.”

The report found firms had moved quickly to protect their businesses, for instance taking advantage of government support, delaying planned investment and bonuses, reducing salaries and pausing recruitment.

Very few had actually made redundancies and just 17% believed it would become necessary later in the year.

Homeworking had led to a big drop in productivity and older solicitors struggled with using the technology. Overall, however, the report found a better than expected drop in output as a result: by less than 30%.

Younger workers and women tended to favour keeping home-working arrangements in place in the long run, but older managers disagreed. However, the majority of firms recognised there would be no return to the status quo ante.

The report forecast face-to-face contact with clients would return in due course, because many respondents cited its absence as a key drawback of working remotely.

It also underlined that one of the results of Covid-19 was a big drop off in law firm staff complaining about stress in the workplace.

This was ascribed to a greater focus on wellbeing, coupled with the benefits of working from home for many, in particular those with families.

“Promisingly, the crisis appears to be the long-awaited trigger for meaningful action. Almost half of respondents report that they have seen a greater focus on their mental health in the wake of Covid-19 home working.”

However, this was not a universal finding. A small firm manager was quoted as saying: “Motivation and morale is down… which makes practising law and running a business harder.”

Also making life harder for senior managers were tougher trading conditions and needing to manage the firm remotely.

Not all younger lawyers thought the flexibility of home-working outweighed the buzz of the office, while others cited reduced support from managers as a concern.

Smaller firms appeared to be better at meeting wellbeing needs than larger firms. Also, the extra pressures that came with less work coming into the firm had a negative knock-on effect on morale and wellbeing. A third of respondents said matters were actually worse under lockdown.

The ‘culture of presenteeism’ had not disappeared with Covid-19 either. The report said: “It seems there’s a risk of solicitors replacing at-desk visibility in the office with round-the-clock availability from home.

“When you are working from your living room, where do you draw the line between work and home?”

Despite the challenges, the legal industry had responded well to the demands of homeworking, with 71% of firms seeing the crisis as an opportunity for innovation, the report concluded. The crisis would have lasting benefits, such as a fresh perspective on the role of technology.

Chris O’Connor, LexisNexis’s small law lead, commented: “The Covid-19 crisis has been tough for the legal sector, but there are positive signs in the darkness. With high growth predictions, improved wellbeing and an uptake of new technologies, law firms have a lot to look forward to.

“But, with commercial and consumer market-places stuttering, much rides on a sharp recovery.”

He finished with a question: “Will a focus on work/life balance and mental wellbeing return when the workload increases?”

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