Legal 500: Firms facing up to harsh realities of lean markets

THE harsh realities of a leaner legal market are having a knock-on effect on the performance of law firms in Birmingham and the wider West Midlands, the latest Legal 500 has concluded.

Nevertheless, many firms continue to thrive although most are having to work harder – and smarter – to collect their fees.

All this week, TheBusinessDesk.com in association with RBS is taking a sector-by-sector look at the state of the region’s legal market as outlined in the latest Legal 500.   

Gary Trueman, RBS Regional Director, said: “With a thinner and lumpier corporate finance marketplace this remains a challenging market to drive year on year growth at present.

“Deals are completing but the gestation period for completion is stretching and affecting the volumes of transactions completed and therefore fee generation.

“Employment law from our observations and conversations with our own clients continues to be a stable source of revenue as companies still find themselves having to comply with a large amount of regulation in order to do their business.”

To download a free copy of The Legal 500 – West Midlands Review 2011, click here

Mr Trueman said Dispute Resolution was a consistent fee income generator, although there were concerns it was not growing as fast as most firms would like.

Meanwhile, many firms in the Midlands have been handicapped by subdued activity in the banking sector although restructuring work is seen as a growth area due to the ongoing economic climate.

Mr Trueman said the situation was effectively “a tale of two markets”.

“Due to the muted corporate finance market and subdued levels of employment from banks and other funders in deal activity, fees have been harder to generate and sustain,” he said.

“On the insolvency / restructuring angle this market reflects the current economic environment. Whilst insolvency numbers have thankfully not been what some had feared, restructuring work has continued to be a growing income earner in the business and corporate marketplaces.”

Four firms continue to dominate the commercial property sector in Birmingham although other practices are still looking to break into the top flight of a sector which was once a guaranteed money-maker for the legal profession but which is now in retrenchment.

“Property remains a market in retrenchment. Developers are looking towards a smaller number of projects and are also focused on refinancing and restructuring existing developments and projects. It will as a sector continue to generate revenue, but we are still some way away from the previous levels of activity and fee generation that dominated the early to mid-noughties,” said Mr Trueman, left.
 
THE growing significance of the Technology, Media and Telecoms sector is also continuing to provide work for many of the big law firms both in Birmingham and beyond, the Legal 500 concludes.