Bellwether Insights 2020: Could small firms be weathering the crisis?

Bellwether Insights 2020: Could small firms be weathering the crisis?

 

Is the overall effect of Covid-19 as bad as feared? What impact will the crisis have on ways of working, operational models and innovation? How can the legal industry rebound?

 

Every year, LexisNexis conducts a flagship research study looking at independent law firms, as part of our well-known Bellwether Report Series. This year, without a doubt, our focus was clearly and squarely on the impact of the pandemic, conducting our study a month or two after the crisis first hit the UK.

As a result of this, our study, Bellwether 2020: COVID-19 and the Legal Industry, perhaps gives a slightly different view on the pandemic. Our findings show that confidence is higher than once expected – but is this more a sign of complacency, rather than positivity?

 

A growing confidence

 

Surprisingly, despite the scale of the global crisis, our research showed that many firms are reporting stable revenues. There is also an air of positivity when considering their projected plans of the next five years, with more than two-thirds of firms currently planning for growth.

However, research conducted at the start of the pandemic by the Law Society and the Bar Council, eluded to a very different sentiment in the market.

At 71%, their research showed a significantly higher number of legal practitioners being concerned that their firm would not weather the crisis at all. Does our fieldwork, therefore, reflect a more recent picture of the state of mind of small firm leaders?

 

Confidence or complacency?

 

There is clearly a lot of confidence in the market regarding small law firms’ belief in their ability to bounce back, which is hugely positive. Perhaps the government initiatives launched in support of small businesses has buoyed the legal market overall?

The majority of firms have taken advantage of the various support options, with many taking up at least one government initiative as financial support for their firm:

 

Firms have enthusiastically taken up government initiatives

 

But is their confidence mainly linked to their own firm’s ability to respond to the crisis?

When asked about the consumer and commercial market, a very different picture emerged from the survey data, with over a third responding that they felt COVID-19 was a ‘critical threat’ to their clients.

Whether their clients are consumers or global businesses, their own response to the crisis will very much be dictated by their clients’ and their revenue streams’ ability to weather the storm over the coming months.

 

Also, covered in the Bellwether report:
  • Firm’s operational response: “There are decades where nothing happens, and week where decades happen.”
  • The human impact of COVID-19: “I want a good work-life balance. That’s more of a priority to me than having a senior position.”

 

Read the full report here and download a free copy.
 

 

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[LexisNexis Bellwether 2020]

 

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About the author:

Amy is an established writer and researcher, having contributed to publications, such as The Law Society, LPM, City A.M. and Financial IT. Her role at LexisNexis UK involved leading content and thought leadership, as well as writing research reports, including "The Bellwether Report 2020, Covid-19: The next chapter" and "Are medium-sized firms the change-makers in legal?"