Nearly two-thirds of solicitors at smaller firms are concerned about the impact of the Solicitors Regulation Authority’s new rulebook, research has found.
The latest findings from the LexisNexis Bellwether research showed that this, along with staff retention and increasing commoditisation, were far more worrying to solicitors than Brexit at the moment.
The paper, The luxury of uncertainty: Inaction in the face of Brexit, found that 47% of the 176 solicitors polled were worried about the political and economic instability of Brexit and the threat it could pose to their businesses, but fewer than one in 10 has made any contingency plans for it.
With those surveyed mainly from firms of 20 or fewer fee-earners, the report acknowledged that this was probably because the vast majority of their work originated within the UK.
It continued: “Independent law firms currently have other concerns on their minds. From our research, it is clear that the industry is not complacent – the players are aware and awake to the challenges they face.”
Almost two-thirds (64%) said they were concerned about the new SRA code of conduct, with 58% citing staff retention – good lawyers were “increasingly attracted to virtual firms/in-house roles”, LexisNexis said.
“The increase in commoditisation in the market, with more areas being handled by unqualified lawyers and DIY outfits, and the challenge of securing and renewing personal indemnity insurance worry around half of solicitors surveyed.
“It would appear that the industry isn’t simply ignoring the challenges presented by Brexit. Instead, it seems that the mental bandwidth of those involved is overwhelmed by the industry-specific challenges – ones they have been struggling to deal with for years already and are still significant today.”
It is still not clear when the SRA will introduce the new rulebook, called Standards & Regulations, but the original thinking of April is clearly off the agenda.
Legal Futures understands that an announcement is likely to be made next week, with July one date that has been talked about.
More broadly, the survey showed optimism among solicitors, with 91% of respondents expressing confidence about the future. Some 78% said that while there may be rough times ahead, they were confident about their ability to react and adapt.
Firms were not standing still, with changes being made “across all areas of the business”, such as hiring more lawyers and increasing investment in technology and marketing.
But the report suggested that firms needed to consider Brexit more closely. “In general… the hope is that with time and with progress, when the scope of Brexit is understood, the industry will rally and adapt to the changed landscape.
“However, the concern – which is most likely starting to creep in at the edges of the market now, with almost half of solicitors expressing worry – is that, when that moment finally arrives, it will be too late.
“The strategy of waiting and holding their nerve to see what happens could see them through the transition period, but it could actually hurt them in the long run.
“Would more focus now enable them to prepare and protect themselves, whatever eventuality comes to pass?”
Jon Whittle, market development director at LexisNexis UK, said: “Clearly, the uncertainty surrounding Brexit is a key factor in lawyers’ reticence to take concrete preparatory measures. It is of course understandable as there is little clarity on what the future will look like…
“Patience is indeed a virtue, but there is a business rationale for having Brexit contingency plans in place to at least limit unnecessary blows to the business in the long run. Brexit isn’t a momentary event, it will unfold through the transition period.”