While a firm’s reputation for quality and technical expertise still matter, clients are increasingly looking for law firms willing to invest in building long-term trusted relationships and a deep understanding of their business operations. At the same time, the ongoing disruptions in the legal market are resulting in renewed pricing and competitive pressures.
Those are among the key findings of the State of the UK Legal Market 2021 report, published by the Thomson Reuters Institute. In 2020, the COVID-19 pandemic led to firms switching to fully remote working environments, dealing with courthouse closures or restrictions, and adjusting to sudden shifts in client priorities. In addition, UK firms and corporates had to deal with the implementation of Brexit at year-end.
Demand for cross-border legal advice has increased since 2017, despite the economic uncertainty in the lead-up to Brexit, with 80% of UK corporates actively looking for international legal support. Last year, 42% of UK corporate legal spend was dedicated to international legal work – significantly higher than the global average of 35%. Nearly twice as many UK corporates (38%) are planning to increase their international legal spend compared with those planning decreases (21%).
Amidst these changes, clients are increasingly turning to trusted, long-term relationships for their legal counsel as they look beyond short-term transactional goals. The report found that strong client-firm relationships are increasingly important, especially when a firm invests the time to thoroughly understand a client’s operations and business strategies, and views the relationship as more of a business partnership. Nearly half of corporates (47%) state that the main way firms can bring more value is to commit to a longer-term partnership.
“Despite dealing with COVID-19 and Brexit, the environment for UK law firms is reasonably healthy,” said Lucinda Case, head of Legal Professionals Europe, Thomson Reuters. “Law firms, for the most part, successfully adjusted to work-from-home and other pandemic-related disruptions. The complexities of Brexit will mean greater demand for international legal work. However, clients’ concerns over pricing suggest that law firms will need to show they are providing strong value and investing in their relationship with the client.”
The State of the UK Legal Market 2021 report can be downloaded at: bit.ly/UKSOLM2021.