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Suzanne Townley

News Editor, Solicitors Journal

Law firms bounce back and lockdown leads to increase in productivity, report shows

Law firms bounce back and lockdown leads to increase in productivity, report shows


91 per cent of South East firms surveyed have seen a recovery in income and a return to profit since the end of the first lockdown

A survey report conducted by Sussex-based chartered accountants, MHA Carpenter Box (MHA), has concluded that 91 per cent of South East law firms have seen a recovery in income and a return to profit since the end of the first lockdown. The report also suggests that working from home has led to an increase in productivity.

187 law firms of various sizes from across the UK were surveyed in May and December 2020 as part of the analysis. In May 2020,14 per cent of the firms surveyed reported either ‘no’ or a ‘minor’ impact on fee income as a result of the pandemic. However, by December this figure had improved to almost 50 per cent. By December 2020, only 9 per cent of law firms said the pandemic was still having a major impact on fees, down from 38 per cent in May.

Head of professional practices at MHA, Charlie Eve, said: “These results demonstrate that legal firms across the UK have been able to adapt their commercial operations in the second half of 2020, and overcome the challenges brought by COVID-19. 

“The wildly pessimistic expectations many of us had at the beginning of the first lockdown have thankfully not come to pass and profits and legal fees have now stabilised and even increased for many firms.

“Even though law firms have generated lower fee income since March 2020, many made immediate decisions to reduce expenditure which, along with government support, helped profitability. We reported in May 2020 that 87 per cent of firms utilised the Coronavirus Job Retention Scheme and the furlough payments reduced outgoings and led to better profitability than expected.”

The survey also highlights how working practices have changed across the sector since the start of lockdown, with 77 per cent of firms now expecting their employees to spend three days or fewer in the office. It was found that remote working did not negatively impact productivity, with 63 per cent of businesses reporting an increase in productivity.

Eve commented: “2021 offers firms an opportunity to continue to reorganise, streamline and go forward as a leaner and fitter business, placing a greater emphasis on employee welfare, particularly on how and where they work. 

“Working from home has shown even the most traditional of firms that they can operate effectively via remote working. With this survey indicating a greater desire from employees to continue to work remotely for part of their working week, the onus will be on employers to embrace this new way of working to support and retain their staff once restrictions are lifted in the months ahead.”