Partners at UK’s largest law firms predict strong 2018
Legal Week’s latest Big Question survey has revealed that two thirds of partners of the UK’s leading law firms expect their firm’s revenue to increase in 2018. Despite a fairly gloomy outlook for the UK economy and continued uncertainty around Brexit, 49% think the financial outlook for 2018 is better than 2017 and an additional 17% expect it to be a lot better. Only 13% stated that they believe 2018 will be a worse year for their firm.
Overall, the vast majority (94%) of partners are confident about their firm’s prospects for the coming year. A quarter are predicting double-digit revenue growth, while a further 70% expect more modest growth of between 0-10%. Only 4% expect revenues at their firm to fall.
These revenue expectations are very positive, despite the fact that nearly half of all the survey respondents believe that Brexit will have a negative impact on activity levels, with 18% believing it will have an even greater impact than in the previous year.
The survey also revealed that partners expect corporate/M&A, banking and finance and dispute resolution to be the busiest practice areas in the coming year. Intellectual property, capital markets and restricting are expected to be the quietest areas.
The merger in May 2017 of CMS UK, Nabarro and Olswang to create the 6th largest law firm in the UK appears to be a herald of more to come, with 35% of partners expecting to see more mergers between UK firms in 2018.
According to CMS senior partner Penelope Warne: “In a challenging market and with Brexit coming up, even though business confidence is high, smaller firms need to think about what direction they are going in and make a transformative move.”
Oliver Brettle, managing partner for White & Cast London, agrees, saying: “We have got a large number of law firms in London and the market is not big enough to sustain them, even though actually I agree with the general business sentiment that things are looking pretty good for this year. I think the mid-tier market will continue to be challenging in terms of pricing and the expectations of general counsel, and that will probably mean there will be more mergers in the UK legal market.”
Hogan Lovells London and Africa managing partner Susan Bright says: “My expectation is that we will continue to see consolidation in the market for some mid-tier and smaller firms. This is partly because businesses need to have sufficient resources to invest in technology, and that’s a driver.”
However, 17% of partners expect there to be fewer transatlantic mergers in the coming year, compared to 13% who believe there will be more.
The optimistic market outlook for UK firms means that they are likely to increase their hiring activity and 30% of partners responding to the survey expect to see more recruitment in 2018. 31% of partners also expect to see US firms continue to expand into London and hire more staff in 2018.
This increase in recruitment activity could potentially have a knock-on effect on salaries, as firms compete to hire the very best talent.
If your firm is planning to hire in 2018, or you’re interested in making a career move, get in touch with Zest on 0333 370 46 16 or firstname.lastname@example.org to discuss the best options for you.