Law firms business confidence is down, with 37 per cent of firms believing that business conditions are negative, an increase from 17 per cent last October.
Despite the lack of business confidence, firms believe conditions will improve over the next two years, The Australian reported this morning.
The report, Commonwealth Bank’s Legal Market Pulse survey, conducted by Beaton Research + Consulting, attributes increasing uncertainty to the economic transition to non-mining led growth.
The report noticed a stark difference between the legal industry outlook and the accountancy firms, the legal sector declining 13 per cent age points while the accounting firms showed an increase in the belief that business conditions are positive.
“There was a blip at the end of last year and we had been expecting the upward trend to continue, but this last quarter has shown that the top 50 firms are telling us that short-term conditions are really tough,” CBA’s national manager of professional services, Marc Totaro told The Australian.
Top-tiers are still exceeding their budgets, the report found, regardless of the decline in business confidence over the last quarter. Mid tiers reportedly missed revenue targets by around 2.4 per cent, while top-tiers beat budgets by 4.9 per cent.
M&A and corporate practices are expected to generate more revenue over the next quarter. IP practice remains a growth area, a whopping 86 per cent of firms expecting an increase in revenue generated from the practice area, compared with 17 per cent last quarter.
Top-tier and mid-tier firms expect to expand their numbers over the next quarter.