The largest law firms in Australia are in their most optimistic mood in years, the latest “Legal Market Pulse” survey from Commonwealth Bank has revealed.
Business confidence among the top 50 law firms in the country jumped 44 points over the last year, to 20% from -24% in 2016. According to CommBank, this is the first positive result of the survey since it started in 2013.
A rise in economic activity like mergers and acquisitions and capital raisings lifted the confidence of both top-tier and mid-tier firms on the country’s performance over the next 12 months. The well-received federal budget has also boosted optimism, the bank said.
“Overall, 30% of law firm leaders said they had positive expectations for the economy over the next 12 months, easily outnumbering the 5% who expressed a negative view,” CommBank said.
Top-tier firms are more confident, where three out of eight expecting better economic conditions in the year ahead. Mid-tier firms were more moderate, with 22 out of 32 having a neutral outlook, although that is an increase from 18 in September 2016.
Current business conditions in Australia are positive, said 38% of the respondents, up from 11% a year ago, with 18% saying conditions are negative, which yielded a 20% net confidence rating.
Nonetheless, firms are cautious about conditions further down the road.
“Yet, at the same time, the outlook for business conditions has flattened significantly, with firms no longer confident that the future will bring better times. Perceptions of conditions in 24 months’ time have fallen from a net reading of 47% in 2016, to 15% in 2017, with 28% expecting conditions to become negative,” CommBank said.
Participating firms also identified their top three business challenges. The biggest challenge, identified by 70% of respondents, is negotiating price with clients. However, this is down six percentage points from last year.
Among respondents, 63% said winning new business was difficult and 43% said competing with other firms was a challenge. Nonetheless, firms’ ability to compete improved, with 52% saying that competing with other firms had become manageable, up by 10 percentage points from 2016.
The yearly CommBank study is based on a survey of chief executives, managing partners, and other senior leaders of the top 50 law firms in Australia.
Related stories:
In-house counsel feeling more confident
Here are America’s highest-paid GCs for 2016
.jpg)
