BCL Legal has undertaken a comprehensive research project looking at growth trends within the legal sector. BCL Legal approached firms across the country to ask them a whole range of questions including the biggest challenges they face, how they expect their turnovers to change and what the main factors will be in driving overall growth throughout 2015.
The research covered firms of all sizes and in all regions – from small regional practices to Magic Circle giants. It showed that 55% of respondents believe that improving profitability is the biggest commercial challenge they face this year; this was followed by achieving financial growth at 39%. Other stated challenges included a lack of talent in the marketplace, ongoing changes within the legal sector (such as ABSs, umbrella brands and legal reforms including LASPO) as well as attracting staff and developing a strong management team.
The survey also asked how much law firms are expecting their turnovers to increase by in 2015. 43% of respondents stated they predicted increases of between 10% and 20% whilst 40% thought it would be less than 10%. Just 5% believe they will see a rise of 20% to 30% and 10% believed that they will see no rise at all.
Recruitment was another topic covered. 73% of those questioned said that they will most likely recruit at solicitor level, followed by paralegals at 40% and legal executives at 9%. BCL Legal believes this is in stark contrast to two years ago when the main demand across the market was for paralegals and legal executives.
The survey then went on to ask whether respondents are expecting to use any interim resource in 2015. 86% said they have no plans to use interims over the next 12 months.
The final question tackled the main drivers of growth. 59% believe that work from existing UK clients will be leading their growth followed by business development/ offline marketing activities at 42%. Increased levels of work from existing overseas clients came in at 15%, digital marketing/ social media campaigns at 12% and acquisitions or mergers at 8%.
James Batt, managing director of BCL Legal, commented: “There’s no doubting that the legal sector has been through some tough times over the past five years. The aim of this survey was to really identify what factors will be helping to drive growth across the entire market. We are definitely seeing a rise in confidence with several disciplines leading the way including litigation, commercial property and corporate.”
James added: There are – of course – the boom areas of London and the South East, but many regions are also seeing a huge upturn in both activity and overall growth predictions – especially the North West, the Midlands and Yorkshire/ the North East. Our research shows that long-term and sustained success is really down to the talents of employees and their ability to develop/ maintain profitable client relationships.”