The pandemic has created major changes and, in some cases, opportunities for the legal profession, but a UK survey indicates the gap between city and regional firms has grown
The survey from Crowe showed a six per cent growth during the pandemic for the UK legal profession, but 40 per cent of law firms outside of London reported a drop in revenue which suggests a migration of clients.
Including private practice firms, barristers, patent agents, and other legal services providers, the UK legal services market was valued at an estimated £37 billion in 2019, increasing by 4.6 per cent at current prices on the 2018 market value, Crowe report.
Despite the expansion of the market outpacing the UK economy over that period, the legal services industry still faced a period of uncertainty, and not just because of impending Brexit changes set to disrupt businesses across the spectrum.
Recent years had seen the industry weather disruption from digital competitors and even an incursion from the professional services world’s Big Four – but nothing could have prepared it for what was set to come in 2020.
UK Law Firms Shrug Off Pandemic
Judging by the results of global professional services firm Crowe’s annual law firm benchmarking, at first glance, the legal services industry managed to shrug off the impact of the coronavirus and recession – however a deeper examination reveals that the crisis may have led to a colossal shift of business between certain firms.
According to the 2020 results, Crowe found that legal services operators enjoyed a remarkable revenue growth of 6.7 per cent. However, while 38 per cent of firms based in London’s City area saw increases of more than 10 per cent, 41 per cent of regional firms found their revenues fell in 2020.
While for many of these firms, the income drop was not catastrophic, as the average decrease in revenue was 4.6 per cent, the number to see a fall in revenues was one of the highest proportions Crowe has seen since beginning research for its law firm benchmark in 2012.
As a result, while regional firms undoubtedly suffered the worst during the crisis, they also feel more positive change has come from the situation than City firms. According to Crowe, 31% of regional law firms said that the pandemic had had a positive impact, as opportunities have been and will be created, compared to just 5 per cent of City firms.
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