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British legal-services boom may be over

An unprecedented boom in demand for British legal services has already passed its peak, the Law Society Gazette of England and Wales says, with a further decline in activity forecast for the rest of the year as recession looms.

The Gazette quotes official figures from the Office for National Statistics (ONS) that showed turnover of almost Stg £3.59 billion in the British legal industry in June.

While this was up 10% compared with May, it was down slightly on the £3.6 billion posted by the sector for the same month last year.

June 2021 was also the third-best month on record for the legal-services industry.

Pay hits profits

The Gazette says that the figures are not a huge surprise, given the financial outperformance of many large firms at the height of the pandemic, when demand for advice was high and overheads at record lows due to lockdowns.

Unrelated trading figures for the US reported by Thomson-Reuters last week showed that the bigger firms are also taking a hit to profits from the sky-high pay rates now being commanded by associates on both sides of the Atlantic.

Julie Norris, regulatory partner at Kingsley Napley, said: “Interestingly June 2022’s figures are slightly down on June 2021, which was the third-highest month for industry revenue on record.

“We are not seeing new highs this year. The performance peak has passed and, given the threat of recession, the question on leaders’ minds right now is whether revenues will hold steady or experience bigger drops.”