Finding new business the biggest challenge, small firms say
One in five sole practices have declining workloads
Finding new business is the biggest challenge for small firms and sole practices, a survey has found.
Researchers said firms had to deal with too much paperwork and solicitors "did not get enough help from the SRA or the Law Society," instead turning to LinkedIn and other online forums for advice.
A hundred lawyers were interviewed for the report by LexisNexis, 40 per cent of them sole practitioners. A total of 85 per cent considered finding new business was their biggest challenge, while 83 per cent regarded compliance as a "major issue". "Changes in compliance, such as the requirement to appoint a COLP and COFA, could not have come at a worse time," the report said.
"A total of 70 per cent spend more time on administration than before, while trying to cope with the demands of these lean financial times."
One in five sole practices said their workload was declining, compared to three or four years ago. The figure was lower for small firms, at only 8 per cent.
Generally, 44 per cent said their business was static, compared to 39 per cent who said it was growing.
However, 60 per cent of small firms said they hoped to grow in the next five years, and one in four were considering mergers.
"We expected that securing new business and dealing with the economic downturn would be some of the toughest challenges for this sector," Nick West, LexisNexis Director of Legal Markets, said.
"What is more disturbing is that something the government can control is getting in the way of a healthy legal sector. Regulation is the one thing that policymakers can do something about. As one solicitor told us, 'we don't have a problem in doing the work; we have a problem in recording what we do'."
West went on: "Inevitably change means that high street law won't look like it did ten years ago. Sadly, some firms will not continue. Dealing with over burdensome regulation should not be one of the reasons they don't.
"A clear message that comes from this research is that government and the regulators should look again at the level of regulation and the requirements they are asking of the small law firm."