Fylde law firms need to make achieving financial stability their number one priority if they want to survive in a changing legal landscape, according to a leading adviser to the sector.
A series of fundamental changes, including the new competition from alternative business structures, more stringent compliance demands, the Jackson Reforms to litigation funding, and reductions in legal aid funding have put enormous financial pressure on legal businesses.
Karen Hain, head of the professional practices team at Blackpool-based Moore and Smalley Chartered Accountants and Business Advisors, believes that while many law firms have responded positively to the changes, thousands more are at risk of financial turmoil because of a lack of a clear growth strategy and a reluctance to change.
Moore and Smalley Moore and Smalley has produced a guide for legal businesses entitled Financial Stability for Law Firms. Karen (above), who is also a qualified Lexcel Consultant, said: “If you survey the UK legal sector, there are some excellent examples of law firms mixing strong financial management with innovation and creativity to build successful businesses, many of them benefiting from the external investment that the Legal Services Act has allowed. These are the ones that planned early and got in their house in order at the beginning.
“There are also many firms heading for potential oblivion, having responded too slowly to the monumental changes that have taken place over the last few years.”