These are tough times for law firms. Formerly buoyant business streams are in the doldrums, prompting a war for talent in the recruitment of individuals with counter-cyclical skills, such as recovery and restructuring. Firms are looking hard at how previously busy transactional specialists can be put to good use in a downturn – with restructuring work offering the most obvious opportunities for the reassignment of lawyers.
The fact that skills are being successfully transferred illustrates that most firms can, with a little ingenuity, do something to improve their position. Although some commentators believe that total UK law firm revenues will increase in the current financial year (or, more cautiously, decline only modestly), one should not underestimate the devastating impact of the financial crisis on the legal sector; particularly on those firms that have historically specialised in residential conveyancing and other hard-hit areas. The latest projections suggest that the combined effect of the credit crunch, the ensuing recession, and the reforms brought about by the Legal Services Act will see some 3,000 law firms disappear over the next four years in the UK.
