Herbert Smith Freehills (HSF) has ensured victory for the Financial Conduct Authority (FCA) in a landmark test case intended to provide clarity on whether companies have valid business disruption insurance claims as a result of the Covid-19 pandemic.
The High Court judgment handed down this morning (15 September) by Lord Justice Flaux and Mr Justice Butcher will be a heavy blow to insurers, with tens of thousands of businesses now potentially in line for payouts on their business interruption policies. Continue reading “HSF ensures victory for regulator in major Covid-19 insurance test case “
After last year’s show-stealing performance when Irwin Mitchell’s profit soared 76% and revenue grew 9%, the firm has reported a more sedate 2019/20 financial year as the coronavirus pandemic continues to take its toll.
The firm on Thursday (20 August) said turnover increased 2.4% to £269.3m from £263m the previous year, with profit before tax growing 11% to £23.7m from £21.4m. Continue reading “‘Difficult circumstances’: Irwin Mitchell reports tenth consecutive year of growth albeit Covid-subdued”
Everybody likes to go along with the crowd, in business as much as life. So as the global economy is battered by the coronavirus fallout and many business sectors are on their knees, it’s inevitable that the legal industry has adopted a subdued tone focusing on the existential challenge it too faces. After all, official figures this week showed that the UK, home to probably still the world’s second largest legal market, saw its sharpest economic contraction since records began in the second quarter of 2020, falling 20.4%, one of the worst downturns in Europe.
The only issue with the profession’s stance is that the emerging facts are establishing this position as entirely unrepresentative of the outlook for major commercial law firms. Legal Business recently highlighted the robust showing in the face of Covid-19 judged from a dozen early results from top-50 UK law firms. The second-wave set of numbers from another group of firms in the same peer group doesn’t just support that picture of remarkable resilience, it materially strengthens it. These results are extraordinary! Continue reading “Comment: City law shows remarkable crisis immunity (but managing partners aren’t ready to spread that message)”
Given the savaging that Covid-19 has done to our collective sense of time, forgive a quick history lesson on the halcyon days of 2019. Pulling together the LB100 report for the 2018/19 period, Legal Business reflected: ‘After a credible performance, the profession now faces a slowing economy at home and abroad amid mounting unease generated by a government under Prime Minister Boris Johnson hitting an increasingly Trumpian tone on forcing the UK out of the EU.’
Even the most casual reader of that year’s LB100 report would have noted the ominous imagery drawing on Conrad, Coppola and Castro as British institutions that summer buckled under the weight of entrenched discord. The message was clear, leading law firms, which increased revenues by 9% across the LB100 to hit £26.35bn, had performed well but an outlook clouded by a slowing economy, Brexit uncertainty and political instability meant harder times were coming. Continue reading “Comment: Apocalypse never – City leaders’ 2020 results show resilience to test the most confirmed Cassandra”
With the coronavirus pandemic still wreaking havoc across many industry sectors, London’s legal elite has continued to buck the dire wider market with the third Magic Circle firm announcing revenue growth.
Results announced today (21 July) from Clifford Chance (CC), show the London outfit confirming robust growth in the face of the most challenging trading environment since the depths of the banking crisis. The City leader said that revenues for the 2019/20 period were up 6% to £1.803bn, up £110m on the previous year, while profits per equity partner increased 5% to £1.69m. Partnership profit for the year totalled £666m, an annual increase of 5%. Continue reading “CC becomes third City leader to achieve post-pandemic growth as revenues climb £110m”
Traditionally, like the proverbial London transit, you wait ages for one set of Magic Circle results and then they start coming in like buses. Hot on the heels of Allen & Overy (A&O)’s financial results, City peer Linklaters has just unveiled its 2019/20 numbers, with a similarly resilient showing in the face of the coronavirus pandemic.
Linklaters today (16 July) confirmed that its revenues for the period to the end of April were £1.64bn, up a marginal 0.7% on the previous year. Pre-tax profit stood at £726.9m, with profit per equity partner ebbing 5.1% down at £1.612m. Continue reading “Linklaters edges revenue up despite global slump as City results start flowing in”
There has been much speculation about the impact of the coronavirus pandemic on the profession but the first set of results from a leading law firm has confirmed the gist of months of market chatter: they’re doing fine.
Allen & Overy (A&O)’s financial results for the 2019/20 year show that the City giant managed the remarkable feat of driving revenues up 4% to £1.69bn, despite nearly two months of its crucial year-end period catching the full brunt of the Covid-19 lockdown. Continue reading “A&O shrugs off lockdown to hike revenues 4% to £1.69bn in first post-pandemic results from UK law elite”
Covid-19 continues to disrupt our personal and professional norms. In business – particularly, the legal industry – seismic shifts are occurring in how work is conceptualized and delivered. Corporate law departments and law firms that have not made digital a priority are considering all options in a new, decidedly digital world.
Remote working and social distancing have ignited a new appetite for technology that accelerates the profession’s agility. The move towards digital has rapidly evolved in all other business functions, and for the legal function it certainly enables much more than remote work. It affords an opportunity to maximize client and professional resource experience and creates new commercial value while redefining legal’s contribution to the business. Continue reading “Guest post: How legal services providers should be changing their models for the digital age”
More than a decade after the 2008 global financial crisis, the world finds itself gripped by a pandemic and the resulting economic turmoil. As we saw in 2008, law firms won’t escape the impact of the recession, particularly as clients trim budgets and reduce demand for legal services. But unlike companies with diverse sources of capital, law firms, still predominantly structured as partnerships, will more acutely feel the cash crunch as they grapple with this outdated ownership model.
Already firms have begun to reduce salaries, hold back partner distributions and furlough employees to combat declines in revenue. In the short term, partners are expected to earn materially less income while firm growth and associate development are paused; in the long term, firms may need to draw down on lines of credit, lay off employees or, in extreme cases, dissolve. Continue reading “Guest comment: An argument for outside investment in law firms for the post-Covid era”
The Covid-19 crisis is creating a lot of learning and insight across the legal sector and the wider communities in which we work and live. Much of this revolves around actions that organisations and their leaders are taking to navigate the crisis – including what leaders should do to manage uncertainty.
A key feature of law firms is that many people are leaders – not just those in formal senior leadership roles. A high degree of distributed management serves a range of teams. That is a real strength of our industry. Empowering those leaders to act in a way that helps their teams and drives the wider business forward is key. Continue reading “Leadership in a crisis (or how to build the ship while sailing it)”