2019 has been an interesting year within the legal market, despite uncertainty over Brexit, signs of weakness in global economies, international trade tensions, and geopolitical risk, the majority of firms have still reported revenue and profit growth (albeit at slower rates than we saw in 2018). But looking forward into 2020, we are expecting to see a period of growth as a number of major UK and global factors begin to take effect. Here are some highlights:
It’s been impossible to escape the effect of Brexit, with the continued political and economic uncertainty causing many firms to be more cautious in their outlook and planning for 2020. Many firms are viewing Brexit as an integral factor determining whether or not they will hit their predicted financial performance. But with the end in sight, regardless of the outcome, we are expecting to see the shackles come off and firms driving forwards, free from the constraints of uncertainty.
The digital Revolution
Technology in the legal profession is nothing new, but the impact of it continues to grow in intensity. As the “digital revolution” continues to disrupt professional services, it is forcing many traditionally conservative organisations to evolve, or face being negatively impacted by the growth of firms that embrace the advantages it brings. These law firms need to adapt in order to survive and thrive, investing in technology and transforming their workforces to drive productivity and innovation.
Main threats in 2020
The growing impact of Cyber risks is impossible to avoid, especially as law firms traditionally hold a vast amount of valuable data. This, alongside Brexit, the retention of talent and the speed of technological advancements are considered to be the threats that most concern law firms, all contributing to a number of firms feeling pressure on their profits.
Can M&A reduce the pressure?
The pressure on profits mentioned above is forcing firms to look outside of the normal routes to drive profitable growth. Increasingly, this involves acquisitions or mergers with non-UK based law firms and international growth to bolster their bottom line. Global firms are responding to the ever-increasing pressure on UK fee income and profits by focusing their growth efforts on the international market - a strategy which is paying dividends.
New recruitment challenges?
The reduction in the size of the market through M&A activity is ultimately reducing the pool of quality specialist candidates available in the market, while the increasing use of technology has broken down many barriers to firms operating across traditional borders. This “availability of talent” has created a key challenge facing many employers, the lack of top-quality individuals continues to drive increased packages, with flexible working environments and benefits becoming a key differentiator. Employers continue to underestimate the appeal of offering a positive work-life balance to prospective employees, and the value this can have as a tactic in competing for talent.
London losing talent to the Middle East?
Living and working in the Middle East continues to be an exciting prospect for many, offering a unique lifestyle change and an interesting and fast paced experience. The GCC is a market that is continuously progressing and thriving, leading to key firms across the region continuing to increase their partnership hires as they expand into new areas, leading to new and exciting prospects for individuals seeking a new challenge.
Make your next move with IDEX
2020 is set to be a big year for the Legal market, with a job-rich, candidate short ecosystem that puts power in the hands of jobseekers. Find your nextl egal job here or speak to us about how we can help your organisation fulfil your legal requirements. For more insights on what’s in store for the Legal industry this year, take a look at our Legal Salary Guide 2020.