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Optimism abound despite lull in local legal needs
Firms that rely on transactional services may see a pause in engagement as local businesses look ahead to a possible change of government at the upcoming federal election, according to a new report.
Grace Ormsby
Pitcher Partners’ legal firm survey ‘Striking the Right Balance’ said that despite a positive outlook in the medium to long-term for Australian law firms, political uncertainty and volatility will challenge firms in the short-term.
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It comes as a notable reduction in the number of firms considering a restructure over the next year, with the report stating 23 per cent of respondents said they would consider a firm restructure, compared with 43 per cent back in 2017.
This is “perhaps reflective of the uncertain environment caused by the ATO’s ongoing review of professional services income guidelines”, the report explained.
Despite such concern, respondents remain optimistic about the year ahead, the report outlined, with 71 per cent of those surveyed experiencing revenue growth now, and projecting further growth for the 2019 financial year.
Nearly 30 per cent of firms also indicated that they are not budgeting at all, which, in a challenging short-term environment, suggests “unnecessary time and cost is spent determining the simple but essential aspects such as how to pay bills and manage cash flow”, the report said.
Calling the lack of planning “surprising”, the report also signified cash flow as a challenge for a number of law firms surveyed, which when coupled “with the fact [that] many firms are delivering below average profits, there is still a large number of lawyers working hard for neither peace of mind nor a great deal of money”.
