Video: How Will UK Law Firms Fare in 2023? Watch Now

On Thursday, Law.com International’s U.K team of reporters and editors hosted a webinar, discussing the big issues the market is facing as we head into 2023: From a looming recession and job cuts, to major mergers, salary wars and emerging sectors.

In case you weren’t one of the hundreds in attendance, you now have the chance to catch up. Just push play, and join Editor-in-Chief Paul Hodkinson, News Editor Rose Walker, Deputy Editor Krishnan Nair and reporters Hannah Walker and Jack Womack as they get stuck into the industry’s biggest themes.

Here’s a flavour of what we talked about in the hour.

Preparing for the downturn

The second half of 2022 saw global M&A slump 33%—the largest second half percentage drop since records began in 1980.

Fueled by the ongoing energy crisis, inflation has led to higher interest rates, all of which drives restructuring and refinancing work, alongside litigation and arbitration which continues to gather momentum. A key feature of 2023 will be a rise in group actions, which we discuss in depth.

We also explores the variety of ways in which firms are financially preparing themselves for any possible blowback caused by the downturn. The team contrasts Hogan Lovells’ most recent full financial accounts, which showed that it has bolstered its cash position to reflect potential declines in revenue in the latter part of 2022 and into 2023, to Linklaters, which has slashed its cash significantly for two consecutive years.

Merger-mania?

One of the biggest stories of 2022 came in its final phase, with news of a possible merger between Hogan Lovells and Shearman & Sterling.

Could it really work? Sceptics abound. Some say talks will be hindered by unshakeable differences in culture, scale and practice overlap.

But the success of the Hogan Hartson and Lovells 12 years ago also had its naysayers. So perhaps the scepticism is unfair.

The team does expect to see more smaller U.K. top 100 consolidations in the market, much like the completion of Mishcon de Reya’s absorption of Taylor Vinters this month.

The associate power struggle 

Has the pay bubble burst for junior associates? There’s disagreement in the team. 

Elite firms including Linklaters and Allen & Overy decided to pause raising newly qualified salaries back in the summer of 2022 setting an industry marker, as their U.S.-headquartered rivals keep the salary race firmly in overdrive.

One of the biggest headaches law firm leaders are confronting right now is retaining and attracting talent. Recruiters say there has been a slowdown in associate recruitment following two years of unprecedented activity levels, while the rate of lateral partner hires remains high.

Questions were also submitted by live viewers including whether Brexit has been fully digested by law firms in Europe and how the legal tech landscape is changing.