A recent survey conducted by HSBC between May – July 2022 has found that 50% of respondents plan to reduce their office space within the next three years. It is important to note that this survey was conducted before the latest economic issues developed. This is an increase of 35% compared to those who responded to the survey in 2021. 66% have said that they are going to repurpose their remaining office space for better collaborative/hybrid working. Finally, 29% of respondents said that they have already accomplished the reduction in office space they need. The average cut in office space was around 13%.
The survey had 76 respondents from representatives of law firms ranging in turnover from £18m to £1bn.
Why are law firms reducing office space?
The global pandemic has changed working practices as law firms were forced to introduce remote working. Although the pandemic is significantly less of an issue now more staff have continued with remote working in some form, whether this is hybrid working or working from home full-time. Law firms have identified that remote working is here to stay. This has resulted in some office space being surplus to requirements. Many law firms have identified this as an opportunity to move to a smaller office space to reduce costs or repurpose office space for better collaborative/hybrid working. This should allow firms to invest in technology to improve flexible/remote working.
Law firms set to increase merger activity
The survey also revealed that 70% of respondents expect law firms to increase merger & acquisition activity over the next year.
Mergers between law firms are increasing with benefits to both parties. Merging with another firm allows the firm to tap into new markets as mergers are often used to start operating in a new location which will help grow the business. Furthermore, with the current economic issues merging with another firm can help make the firm more resilient in an economic crisis such as Covid-19.
How can we help?
Hawsons is one of the few accountancy practices with a dedicated team of solicitor accountants specialising in the needs of solicitors and legal professionals.
We act for a large number of law firms across all three of our offices and offer a wide range of services which are tailored to meet their individual needs. Our legal client base consists of a multitude of firms of varying structure and size, from sole traders to limited companies and LLPs with corporate members.
Our understanding of the unique issues that many in the sector are facing, combined with our technical experience, allows our solicitor specialists to provide you with proactive, commercial and informed accountancy and tax advice.
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