According to a new study by Macquarie Relationship Banking only 14% of Australian law firms are concerned about another downturn and amongst higher profit firms that figure drops to 4%.
“Although there is still some uncertainty over the state of the global economy, the outlook in Australia and most of Asia is strong,” said Paul Quinn, executive partner of the corporate department and practice director of the Melbourne office of Allens Arthur Robinsons.
The 2011 Legal Best Practice Benchmarking Survey found that in the coming 12 months the two main issues facing firms were maintaining and growing profitability (53%) and attracting enough new target clients (48%).
Although for Allens, other challenges are far more pressing: “The markets we operate in are increasingly competitive, so making sure we continue to be at the top of our game has always been and will always be the number one issue,” said Quinn. “If you do that well, then issues such as profitability and retaining your best people tend to fall into place.”
Corrs Chambers Westgarth partner and CEO, John Denton, says the economic and business environment in which clients operate has changed permanently as a result of the global financial crisis. “We recognised several years ago that we are in an increasingly client-driven market. Clients want law firms who are attuned to their challenges and can apply innovation in working with them to achieve solutions,” said Denton. “Law firms need to be externally focused on the opportunities and challenges this creates and help clients work successfully in this new environment,” he added.
A key part of the Corrs’ 2015 strategy is to increase the scale of the firm by at least a third over the next five years. “We will achieve this targeted growth by promoting internally and by recruiting market-leading practitioners where necessary,” said Denton.
37% of higher profit firms (those with more than A$1m profit) placed staff retention and recruitment as the third top issue in the next 12 months. “Making sure you attract and maintain the best people possible is always a challenge,” said Quinn. However, only 22% of lower profit firms (less than A$1m profit) considered it an issue. Overall, 30% of firms across the market considered staffing a firm as an important issue going forward.
Fee growth and diversification on the agenda for Australian law firms 20 April 2011
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