‘What pandemic?’ the legal services markets seem to say . .
Legal services revenues have not been touched by the pandemic during the past year, according to figures in the UK that show a major growth in revenues for the sector – a fact that is also evident with the US legal sector.
The UK’s law sector has achieved a record-breaking £41.6bn turnover during 2021, according to data released by the Office for National Statistics (ONS) this month.
The pandemic, including the Omicron variant’s arrival, had no impact upon the continued legal sector growth with figures showing an increase of over 7 per cent in December. The ONS figures had shown that revenue for legal services had fallen in Q1 and Q2 of 2020, but then lifted and with a strong recovery.
The growth in legal services revenues is reflected by both US and UK law firms as the transactional work has continued to grow.
A regulatory partner at law firm Kingsley Napley, who have analyzed the legal services figures put out by the ONS, told the Global Legal Post said “These results no doubt chime with firm leaders’ on the ground experience that workflow was buoyant even during a time of increased restrictions due to Covid-19 and the Omicron variant. However, firm leaders should not let these strong numbers distract them from the importance of supporting staff, attracting talent and continued regulatory oversight during the months ahead.”
Norris told the GLN that junior lawyers in particular should not be ignored in the face of surging profits and high workloads, an issue that has seen big demands and big money paid to keep legal talent in the face of the growth in revenues and profits.
“Employers must ensure they have the right systems and processes in place to ensure compliance and as part of that risk profile, look carefully at how they create and promote a positive culture,” she said.
US Legal Services’ Boom Too
The growth in legal services revenues has been a worldwide factor with jurisdictions from Australia to the US reporting huge growth in workloads and revenues. The pandemic has actually worked in favour of some biglaw firms as they have harnessed the growth in deal flow and litigation to boost revenues.
In the recently-released report from the Center on Ethics and the Legal Profession at Georgetown University Law Center and the Thomson Reuters Institute, the 2022 Report on the State of the Legal Market, the resilience of the legal markets was demonstrated once more.
However notwithstanding the strong growth in legal services demand worldwide, the spoiler sitting at the edges remains the war for legal talent.
The annual report reviews the performance of U.S. law firms and breaks down the factors that drive the need for firms to take a longer-range, more strategic view of their market positions.
The report shows that demand for legal services soared in 2021 after a slower start to the year and driven in the US mainly by corporate and real estate work which continued to grow to a point where they exceeded the pre-pandemic levels.
Combined with the growth in work has been an ‘aggressive’ move by law firms to increase their billing levels, which contributed to high law service revenues for the year.
Law Talent Woes Continue
The battle for legal talent to provide the legal services is the factor that could upset the legal applecart however, reflected in the reports in both the US and the UK.
LawFuel has extensively reported on the law salary wars and related factors and as lateral moves and law talent battles continue to place upward pressure on lawyers’ remuneration it also stands as a major potential obstacle towards continued growth at the levels we have seen in the past year or more.
2021 saw some firms losing as many as one quarter of their law firm associates with the attrition continuing apace as a major concern for the firms.