Hits to hip pocket and productivity for firms

Hits to hip pocket and productivity for firms

22 March 2021 By Jerome Doraisamy
Ben Lethborg

The past year has seen diverse but concerning trends for law firms across the board, with half of the profession suffering financially and firm productivity dependent on the size of the business.

Pitcher Partners, a national association of professional services organisations across Australia, has released its annual law firm survey, which this year has focused on the impact of the COVID-19 pandemic on firms, their staff and business operations. Over 80 firms were surveyed, ranging from BigLaw to boutique.

The financial impacts for Australian firms have been varied, the association found, with almost half (46 per cent) reporting having been negatively impacted by the age of coronavirus. Of those firms, 58 per cent saw a decline in new work, 48 per cent saw a decline in revenue, and 18 per cent had an increase in bad debts.

The balance of firm respondents was either unaffected financially by the pandemic (29 per cent) or saw positive outcomes from the past year (25 per cent).


When it came to firm productivity, it appears that the extent to which practices were productive was dependent on their respective size.

Small firms (identified by Pitcher as having zero to one partner) saw the greatest drop in productivity – 39 per cent – with just 24 per cent seeing an increase on this metric and 33 per cent seeing no change.

Firms with two to 10 partners fared slightly better: 30 per cent of such practices experienced decreased productivity, 28 per cent had an increase and 38 per cent remained the same.

Firms with 11 or more partners, however, had the most favourable findings on productivity: 38 per cent saw increases, 28 per cent had no change and just 25 per cent experienced a decrease.

According to one chief operating officer who responded to the survey, “Increasing productivity could be driven by staff and partners not taking leave and so continuing to work through. Maybe the drop in productivity will be deferred until 2021 when people start to take normal amounts of leave.”


Pitcher also made some concerning findings regarding staff wellbeing in law firms.

Nearly seven in 10 firms (68 per cent) reported changes to workplace wellness during the course of 2020, with more than half of all firms surveyed (52 per cent) seeing a decline in levels of health and wellbeing. Twenty-three per cent saw no change and just 14 per cent experienced an uptick in wellness.

The past year has also offered opportunities for some firms, however.

Almost one-quarter (24 per cent) of firms surveyed developed new business lines, according to Pitcher. Moreover, 31 per cent of firms are looking to increase their staffing numbers, and just 8 per cent think they’ll have to cut staff.

Taking into account these four overarching concerns for Australian law firms – finance, productivity, wellness and business opportunities – there are significant challenges on the horizon for legal practices across the country, said Pitcher partner Ben Lethborg (pictured).

“What’s clear from legal firms across Australia is that, despite the challenges of 2020, it’s given firms ideas for new ways to approach working and highlighted the importance of employee wellbeing, which will remain key in 2021,” he said. 

Are you looking to launch your own practice but not sure where to start? Lawyers Weekly’s Boutique Law Summit returns to Sydney this month, designed for individuals who are looking to maximise their competitive edge in a post-pandemic marketplace. The event will be held on Friday, 26 March at the Four Seasons Hotel with a full agenda available to view here. To learn more about the event, click here.

Hits to hip pocket and productivity for firms
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