New survey reveals top threats to major UK law firms
updated on 07 November 2022
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A new survey of UK law firms with revenues of more than £100 million revealed that competitors with strong tech-driven business models, a surge in lateral hiring and a sharp growth of US law firms are all likely to cause major disruption.
HSBC’s latest Investment and Growth Strategies in Law Firms report discovered peer firms with more tech-driven business models were cited as the largest threat to market disruption (67%). Lateral recruitment, the process of hiring employees who are already working in a similar position at another company, came in second (46%), and the growth of US law firms was viewed as the third greatest concern (36%). The Big four accounting firms (PwC, EY, Deloitte, and KPMG) were a close fourth in top concerns, at just 5%, under worries over US law firm growth
The survey quizzed the most senior strategic leaders at UK firms who had a global annual revenue of between £18 million and £1 billion plus to understand their strategic priorities and offer insight into leading law firms’ outlook. The findings offer insight as to why 70% of senior figures within UK law firms are expecting increased merger and acquisition (M&A) activity in the next 12 months according to data published by Legal Cheek. The report also states 50% of senior strategic leaders now plan to reduce office space over the next three years, an increase of 35% compared with last year’s survey.
Repurposing office space for a more collaborative work environment is a popular choice for leading firms, while 29% say they’ve already achieved their desired reduction following a calculation of the impact of the pandemic on hybrid working and the rising cost-of-living crisis.
The most popular structure for law firms continues to be the limited liability partnership with 83% of those surveyed stating that it’s the most desirable and most likely business structure to be in place in five years’ time. Privately and publicly listed company structures compromised in equal parts for 16%.
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