Last week's forecast by the Organisation for Economic Co-operation and Development (OECD) that Australia is set to soar out of the economic downturn sooner and more sharply than other countries has been met by caution by law firm leaders.
Stuart Clark, acting chief executive partner at Clayton Utz, said while the lift in business confidence was encouraging, caution should still be maintained.
"I guess the concern is that there is clearly still a degree of uncertainty. There is a range of data out there and, whilst the OECD's reported projections are encouraging, there is still a degree of 'wait and see to what extent those projections are correct'," he said.
"In the United Kingdom, Europe and, indeed, in America, things are not going to recover as quickly as might be the case in Australia, and that is obviously of some concern, although [the firm is] encouraged by what's happening in China."
The OECD identified China as the driving force behind the global recovery, crediting "massive government stimulus" measures with lifting expected growth there this year from 6.3 per cent to 7.7 per cent and to 9.3 per cent next year.
Paul Quinn, head of the corporate department at Allens Arthur Robinson and practice director of the Melbourne office, said the firm has three offices in China and has been concentrating on the region.
"We're looking at that very closely and, in particular, focusing on inbound investment from China because we see that there is a lot of activity by Chinese companies looking for investment," he said.
"But also not just China - I think what this [forecast] does is it shows there is a bit of confidence in Australia as a destination for investment so offshore investors are looking at Australia as a relatively safe investment."
The OECD says the local economy should shrink 0.3 per cent this year, less than any other OECD economy, and far less than the contraction of 1 per cent that was predicted in the May budget.
Next year the economy should roar back to 2.4 per cent growth, also above budget forecasts and more than any other OECD economy, apart from those recovering from collapse in 2009.
John Corcoran, president of the Law Council of Australia, said it was pleasing to see that Australia's recession is not hitting as hard generally as in other economies.
"I've recently had meetings in other countries - with the law societies of other countries - and it's obvious that to date the effect on our profession has not been as extreme as it has been in places like Ireland and the UK. However, there still plainly has been an impact on our firms," he said.
"Our firms are simply a reflection of the general business community. For our firms to be really busy, our clients need to be really busy, so if there is a shortage of credit and less commercial activity then there is less commercial law to be done and ... if there is a quicker turnaround in Australia than in other countries - if credit becomes more freely available, if business transactions resume to a normal level - then, plainly, that is very good for Australian law firms."
The OECD specifically commended the Australian Government for infrastructure spending, the cash bonus payments and efforts to repair the financial sector.
Clark agreed that the GFC had increased the focus on regulation and scrutiny of financial practices.
"In Australia there are a range of measures already before the Parliament which will impact on [the financial sector] and that will inevitably generate additional compliance and legal work for law firms operating in that space," he said.
The OECD did caution, however, that policymakers should not ease up on efforts to stimulate their economies and said the Rudd Government needed to "maintain the expansionary thrust" of its policy.
- Sarah Sharples