Martin Gill, partner and head of BDO LLP Scotland, has authored a report from a survey of Scottish independent law firms.
The report, downloadable, outlines the current confidence in the sector as well as summarising some of the steps taken by these firms to remain robust in a climate of uncertainty.
Gill, quoted in the Scotsman and in a BDO press release about the report, states Scots law firms are optimistic about the coming year. This is despite the fact all the law firms acknowledge the marketplace in Scotland for legal services continues to be extremely competitive.
Gill puts the confidence down to law firms’ improved financial management and strategy developments to continue to be profitable in such a saturated area of business. Gill found the survey highlights significant financial reconstructions in Scots law firms occurring, with an awareness for putting in place much more quantifiable performance measures, encouraging realistic expectations.
Scots law firms, Gill states, have been forced to revaluate and put their houses in order with a “greater eye on the bottom line than might have occurred in the past“.
The report also offers caution with 37% of law firms surveyed believing some firms will become insolvent in 2016.
In an interview on BBC Radio Scotland this morning, Martin Gill was asked: having seen Scots independent law firms merge with UK firms and others suffer insolvency in recent years, and with an expectation of more to follow this year – are there too many lawyers in Scotland?
Gill replied that this is always a common held belief and although the answer is probably yes, firms are announcing both projected profits and increased numbers of employees for the coming year. The firms which sadly become insolvent have still not likely adjusted their business models enough after being made susceptible to market changes from 2008/9.
This report, Gill went on, sees law firms taking tactical decisions when assessing opportunities to challenges: sometimes this will be mergers, sometimes by becoming more efficient businesses on their own. It suggests overall that while Scots law firms may continue to reduce in the next year or so, lawyer numbers in Scotland will likely continue to be largely unaffected as the work continues to come in from clients.
The PDF of the report can be found below: