Sector Focus


Legal


Competition is legal sector’s biggest threat


Increasing competition – rather than Brexit – is the biggest challenge facing Birmingham’s law firms, according to new research. The 2018 Smith & Williamson Law Firm Survey shows that negotiating the competitive landscape remains the top priority for law firms in the city, as opposed to the UK’s impending exit from the EU. Less than a third (32 per cent) of


respondents now regard Brexit as a threat to their business, compared to almost three-quarters (74 per cent) of firms who expect to face a slight or significant increase in competition over the next 12 months. Law firms see competition


intensifying over the next three years, reporting that they expect to see increased levels of competition both from their existing rivals and from niche players with deep sector or product experience, as well as from new entrants including the Big Four accountancy firms.


‘Law firms face increasing competition both from their traditional rivals and from new entrants’


Smith & Williamson canvassed the


opinions of senior executives at the UK’s Top 100 law firms, many of which have offices in Birmingham, on their attitudes to a range of key issues affecting the market. It found that mergers and


acquisitions remain an unpopular choice for expansion, with law firms preferring to make selective hires of top performing teams. Technology spend is increasing


among all survey respondents but is focused on incremental efficiency improvements rather than business transformation. Meanwhile, new entrants are


intensifying an already fierce “war for talent.” Salary pressure is still rising as US law firms continue to lead the way and rivals are addressing this with increasing specialisation and geographic expansion. John Hodgson, managing


partner at Smith & Williamson in Birmingham, said: “Our research has unearthed a self-confident profession that sees genuine opportunity amid the current uncertainty, but nevertheless needs


John Hodgson: Brexit not the biggest challenge


to fight for the very best people in an increasingly tough marketplace. “Law firms face increasing


competition, both from their traditional rivals and from new entrants, such as the Big Four accountancy firms. The strongest firms have focused on identifying their key strengths, articulating them to clients and improving service delivery. “No doubt the continued


downward pressure on fees, compounded by increases in associate salaries and increased demand for legal technology solutions, are factors that have led firms to feel that the legal market remains a competitive landscape.” John Hodgson says that tackling


“lock-up” – outstanding payments owed to law firms by clients, along with unbilled work – remains a priority for many but that far from improving, the amounts owed have now reached record levels. “This leaves firms vulnerable to


cash flow problems and bad debts but there are solutions for those firms willing to take the problem in hand. “We have been running this


annual survey for many years and, in that time, law firms have always stated they will be focusing on improving lock-up. Yet during this period, the amount of money that firms have in both work in progress (WIP) and unpaid bills has increased year-on-year. “The legal profession may need


to find more creative solutions to preserve productivity and profit margins in the face of a wave of mounting business pressures.”


66 CHAMBERLINK December 2018/January 2019


Birmingham law firms move up the rankings


A number of Midlands’ law firms have moved up the rankings in this year’s Legal 500, widely recognised as the legal industry’s ‘bible’. Among them is Thursfields, whose reputation for corporate and


commercial law services was recognised as the teams moved up a tier in the ‘Legal 500’. Legal 500 said that the Thursfields’ corporate team “offers a


pragmatic view of the level of complexity needed depending on the individual situation, and clearly explains each element of its documents and why they are needed.” As well as its expertise in advising businesses, Thursfields was also


praised for its services to private clients and charity. Thursfields managing director Nick O’Hara said: “This has been


another good year for the firm. We recorded our fifth consecutive year of 20 per cent growth and this is now reflected in Thursfields’ rankings in the legal profession.” Another firm, Sydney Mitchell, has also been praised in Legal 500,


and has been described as “very strong” and “probably the best in central Birmingham outside the large national and international firms” for dispute resolution and commercial litigation matters. Sydney Mitchell senior partner Div Singh said: “What an excellent


result again this year for Sydney Mitchell, with the firm maintaining its ranking in Tier 1 for our contentious probate work.” And law firm VWV, which has an office in Birmingham, has seen a


number of its lawyers and practice areas commended by Legal 500. Clive Read, Birmingham office partner, said: “This year’s rankings


recognise the outstanding legal work of our team here in Birmingham. The firm's position in the legal directories relies heavily on client feedback, so a special thank you to all of our clients involved in the process.”


Thursfields celebrate five years in Halesowen


Celebration (L-R): Pam Deol (Thursfields), Lisa Billingham (Precious Gems), Andy Steel and Bev Harrison (both Handelsbanken) and Julia Warrilow (Thursfields)


More than 30 local clients, professionals and business contacts joined Thursfields Solicitors to celebrate the fifth year of its presence in Halesowen. The leading Midlands law firm


held the event on 19 September at its offices at Hyefield House, on the Hagley Road. Michelle Hetheridge, Wills &


Estates director at Thursfields, said: “With over 30 staff based at Hyefield House, our Halesowen office is our main hub in the Black Country, and we’re delighted to be celebrating our fifth anniversary. The office has seen both our commercial


and private client teams strengthened in recent years, with an ambitious recruitment strategy. “We were delighted that the


Black Country Chamber of Commerce recognised our efforts with the accolade of High Growth Business of 2017, reflecting how we’ve more than doubled headcount and revenues over the past five years.” The Halesowen office is


supported locally by colleagues at Thursfields’ Sedgley office, and regionally at the company’s offices in Birmingham, Solihull, Worcester, Stourport and Kidderminster.


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