More law firms to collapse, say partners
An overwhelming majority of law firm partners believe more major firms will go bust over the next two years, research today revealed, sounding a further warning to the profession after last year's dramatic downfall of New York firm Dewey & LeBoeuf.
Legal Week’s Big Question survey found that 95 per cent of respondents thought it a possibility that a large firm would flop in the near future, including 32 per cent who believed it ‘likely’ to happen and 42 per cent who described the possibility as ‘very likely’.
Commenting on the survey – which took in the views of more than 100 law firm partners - Slaughter and May executive partner Graham White told the magazine: ‘Firms without a clear market position, differentiation or sound financial management might find it harder to cope. At the moment, the market is much tighter, with increased pricing pressures, profitability squeezed and work reduced against a background of fixed overheads that represent a large proportion of outgoings and can be difficult to cut back.’
The survey also found that 61 per of respondents had fears that their own firm might experience financial problems, including 13 per cent who said they worried about such issues ‘a lot’. But almost 90 per cent of respondents were confident that their firm had policies in place to deal with such problems.