The annual Law Firms Survey by PWC has shown that the majority of surveyed law firms reported “extremely positive financial results,” due to increased profit margins this year, despite concerns that the Covid 19 pandemic would negatively affect the legal sector. The survey also reported an increase in concerns over cyber security data breaches amongst legal professionals.

PWC Law Firm Survey: Law Firms and the Pandemic

Within this year’s survey, the PWC Network found that a large proportion of law firms found it difficult to adapt to new ways of working throughout the pandemic; however, as a whole, firms have now embraced these changes as shown in the positive financial results. 97% of top 100 firms outperformed their revenues from the previous summer. 75% of top 100 UK law firms noted increases in fee income. Some law firms have seen record profits in the last year with the top 100 law firms reporting an average increase of 20%.

Unfortunately, this optimism is not set to last and the same profit level increases are not expected in the next financial year. Some of the growth in profits has been attributed to overall savings made by firms due to reductions in travel expenses, real estate, and business development costs. As restrictions lift and the pandemic ends, these costs will inevitably start to rise again and law firms should seriously consider the expenditure structures.

Law Firms Post Pandemic

Within the survey, member firms highlighted two main areas of concern;cyber crime and a shortage of talent.

Cyber crime: As remote working is set to continue in a post pandemic world, a need for investment in technology has been highlighted to ensure that staff and law firm clients continue to receive a high level of service and satisfaction.

Moreover, this continued investment in technology is vital to tackle the issue of cyber crime, a risk which most law firms and financial service businesses face daily. The threat of cyber attacks should now be the top priority for law firms as 90% of firms within the survey stated that they were “extremely or somewhat concerned” about the threat.

Shortage of talent: 87% of law firms have expressed their concerns about there being a shortage of talent, a huge rise from 47% last year. The reason behind the shortage of talent has been narrowed down to “relentless pressure on salaries being generated by US firms, coupled with a buoyant legal market.” It was also stated within the report that:-

“In a working world that is moving towards a hybrid of office and home working, firms need to ensure staff receive the coaching, networking opportunities and cultural immersion that will generate loyalty and help stem attrition.”

What Can we Learn from the PWC Law Firm Survey?

The PWC Law firm survey has highlighted a few positive and negative points regarding those providing business services within the legal industry. One of the main points to note from this survey is the fact that law firms have adapted well and most firms, including small and large firms, have performed notably better than expected at the beginning of the pandemic.

PWC’s Kate Wolstenholme stated the following:-

“These are fast-moving and exciting times for UK law firms as they continue to adapt to operating flexibly in a post-pandemic climate.”

“Law firms have experienced significant disruption over the last 18 months and most firms have been agile in fast-tracking changes in their working culture.”

One of the main concerns highlighted within the report was the perpetual risk of cyber crime. Law firms should take note of this concern and make this a serious consideration when adapting to new ways of working, such as allowing staff to continue to work from home. Incorporating the use of new law firm technology and investing heavily in data protection is a must for those in the industry.

Law firms will also need to step up when it comes to attracting new talent to ensure a better, more stable workforce. They can do this by providing adequate training and networking opportunities.