Legal spending ‘set to fall’

LAW firms will face a tough time in the second half of the year as corporate clients reign in spending.

That’s according to legal research firm Acritas which predicts spending on corporate legal services will fall sharply in the coming months after recording increasingly negative sentiment from legal buyers.

The downturn has already forced many law firms to cut jobs as it responds to the decline in corporate activity.

Acritas’s monthly tracker survey predicted a modest drop in spend of 6% in February, but this figure grew to 12% in March and 17% in April.

The research showed the hardest hit practice areas are corporate finance and property legal services.

Lisa Hart, Acritas’s chief executive, said: “There has been a delay between the onset of the credit crunch, the loss of jobs, and a measurable decline in legal spend.

“Whilst many headlines have reported law firm redundancies over the past few months, only now are we seeing evidence of how deeply the economic crisis is going to shape legal spend. We are seeing even more negative results in our US research.”