The legal sector in Ireland has undergone rapid development in recent years, which has contributed to fast-scale modernisation in the way law firms operate. However, the impact of the coronavirus pandemic has been inescapable, affecting economies on a global level, meaning that law firms have suffered unprecedented disruption.
As with many other industries, the legal sector has been forced to pause as a result of COVID-19, which has encouraged businesses to reconsider their strategies and reimagine the future of the law firm workplace itself. Many firms have been forced to cut salaries, while others sought to participate in the government’s temporary COVID-19 wage subsidiary scheme to improve their finances as clients stall projects.
Research carried out by financial and professional services firm Smith & Williamson Ireland revealed that levels of unbilled and unpaid work in progress were already rising among Irish law firms, and as firms continue to suffer the financial losses caused by the coronavirus pandemic, it is only natural that the sector feels this impact.
In its latest annual survey of Irish law firms, which took place in 2019, Smith & Williamson found that unbilled work in progress stood at 36% of working capital, a significant increase from 24% just two years earlier. This sharp rise proves that legal firms are already facing multiple challenges that are impacting their bottom line.
Lessons to be learned
At Gibson & Associates, we have maintained our business entirely throughout the pandemic, ensuring all staff have been given the opportunity to work during the lockdown and ultimately serve clients to the best of our ability during this uncertain time.
We have recently launched a Work-in-Progress File Acquisition Service, the first of its kind, to help legal firms to extract value from files. This new venture provides a viable solution for law firms and solicitors across Ireland that may be looking to exit from a certain area of law, retire or reduce cost base – something that is affecting many legal practices during the coronavirus outbreak.
Many firms will unfortunately struggle to maintain profitability following the pandemic, which will necessitate taking an honest look at what they should be focusing on in terms of specialisms and practice areas. Traditionally, it has been difficult to exit a business due to professional indemnity insurance challenges and costs, as well as there being difficulties in determining value due to business structure. We wanted to create a solution that works for all parties.
If these unprecedented times have taught us anything, it is that law firms need to be ultra-lean and able to pivot quickly at all times in order to survive. As a result of coronavirus, there will be a heavier focus on online offerings and a lot of unnecessary meetings and delay due to scheduling should hopefully dissipate. The time is certainly right for consolidation in the sector given the cost of running a legal practice and the need for specialist services.
Find out more about our Work In Progress Acquisition Service
At Gibson & Associates, we have an established track record of providing solicitors and law firms with an efficient and confidential way of consolidating their practice or beginning the steps towards retirement.
If you want to extract value from your files, our unrivalled, fast and bespoke solution will provide you with a clean break with no lingering legacy issues. Our offers are extremely competitive and confidentiality is assured