The latest legal sector report from NatWest published at the beginning of September looked at the financial health and general outlook of small to medium sized law firms across England, Wales and Scotland. The results make fascinating reading, here’s why:
Reasons to be cheerful?
First, it wasn’t all doom and gloom! 9 out of 10 firms remain optimistic about their financial performance in the coming year, even though they don’t expect fees to rise enough to offset increasing outgoings – over half of the firms surveyed expected to increase their charge- out rate by less than 5%.
It’s all about people
Second, over half of firms think their staffing costs could rise by between 10% and 12%, whilst 46% of firms identified attracting and retaining talent as their biggest concern for the year ahead – overshadowing fears about the economic outlook, cashflow and inflation.
Brace for impact
The obvious result of these two factors is that law firms’ margins are expected to come under increasing pressure.
Maintaining a steady cash-flow is likely to be crucial for firms as the steep rise in interest rates starts to bite and cost of living pressures continue, lock-up levels and cash collection will become more important than ever.
Safety in numbers?
As reported by The Law Society Gazette, a third of firms are likely to seek a merger or acquisition as a short-term strategy with one in five firms having been approached by a consolidator in the past year but is there an alternative way for smaller firms to weather the current financial headwinds?
There is another way
At Global BPO we offer a different solution for law firms looking to control people-costs and overcome recruitment challenges. We work in close collaboration with our law firm clients to provide high-quality, cost-effective staffing solutions.
Our established bank of professionals delivers skills and experience that may currently be difficult or impossible to source. Added to which we save our clients the direct costs of employment such as national insurance and pension contributions and the indirect costs of recruitment, management and office space.
All of which can lead to improved margins, increased profits and no need to resort to the upheavals of a merger or sale!
How can we help you?
For more information and to find out how we could assist you, contact our Client Manager, Suzie Young, at: email@example.com.