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Bright outlook for small firms predicted in Bellwether report
A bright future for small legal practices is predicted in the latest Bellwether report by publishers LexisNexis, which covers firms in England & Wales.
The Bellwether report 2019: Is the Future Small? finds that 92% of respondents from small law firms believe that the ability to remain in control is an advantage of small firms, while fewer than two in 10 would want to work for a large firm – and nearly two thirds (64%) have such experience in the past. The authors believe that “the flight to smaller firms is increasing”, as three years ago the proportion with large firm experience was 53%.
Various advantages are cited by those currently with small firms (defined in the report as those with fewer than 20 fee earners). They include a better client experience (82% say it is a “major benefit”, and a further 10% “nice to have”), a realistic charging structure (69%/21%), less bureaucracy/swift decision making (76%/13%), “better lawyering”, as clients are serviced by a more senior lawyer (70%/16%), and flexi-working (58%/24%).
On the downside, “major issues” cited included difficulty in growing a model or succession plan, with clients choosing the solicitor personally rather than the firm (51%), increasing compliance regulations (51%), lack of capacity which may necessitate turning good work away (39%), difficulty taking time off (37%), being too small for credibility with some clients (32%), and no one to delegate to (28%).
However, with a higher proportion of respondents assessing the benefits to be a “major” factor than they did the downsides. the benefits still outweigh the negatives for those who actually work in small firms.
The report comments that while attracting new business is one of the top challenges facing firms of all sizes, it is articulated as a particular struggle for solicitors at small firms, perhaps because “while individual working practices are more agile in small firms, larger firms are able to be more generally proactive about change. With more resources at their disposal, larger firms are, on average, implementing and planning for more changes, compared with their smaller counterparts. Similarly, firms with an eye for growth also make more changes as they are investing in their future”.
However, half of those surveyed (51%) believe their firms are already optimally sized for success, while 41% say they need to be bigger and 7% don't know.
As for confidence, 21% are “very confident” about the future, 70% “quite confident” and 8% “not very/not at all”.
Click here to access the report.