Competitive pressure among the region’s law firms is on the rise, according to new research from accountancy and investment management group, Smith & Williamson. Firms from across the South Coast and the South East took part in the survey.
The survey reveals that 60% of the region’s law firms report growing competition, with niche firms representing the primary challenge. Despite this, confidence remains very high with 93% of firms positive about the year ahead. A focus on specialist sectors, IT investment and lateral hires are reported as the three greatest opportunities for the region’s law firms.
The survey also looked at firms’ appetite for mergers and acquisitions and 43% of firms are looking to acquire or merge with another firm in the coming year, according to the survey. This is a sharp increase since last year when just 28% were seeking a partner.
“The right acquisition combined with an effective strategy can help firms to scale-up and develop market presence in a chosen niche or area, and so set themselves apart. The growing trend of relatively small acquisitions can also help to deliver benefits relatively quickly compared to a merger of two similarly sized businesses,” said Rebecca Combes, Head of Business Tax at Smith & Williamson.
She continued: “Differentiating the firm in a crowded marketplace is considered a major challenge by law firms, while focusing on specialist sectors can help firms to strengthen their niche and so differentiate themselves. Like any brand, being able to explain and demonstrate why your service is different and superior to the competition is fundamental to taking market share.”
“There are plenty of opportunities out there, but the growing strength of specialist firms, coupled with the arrival of new entrants to the legal sector means firms must fight hard to maintain market share and keep up with clients’ growing demands. The uncertain economic environment compounds all this. Ultimately, setting, deploying and executing a strong strategy is fundamental.”
