Transcript - 2023 Law Firms' Survey overview

Transcript

Kate Wolstenholme: I’m delighted to launch this year’s PwC Annual Law Firms’ Survey. The legal sector has had another strong year, but our survey highlights some challenges ahead, with bold steps needed to transform into a top-performing law firm of the future.

Firms have achieved fee income growth averaging 8-10% despite the ongoing challenge of macroeconomic volatility. But given inflation, in real terms fee income has fallen for a number of firms and pricing remains a focus area.

Cost pressures across both salary and other costs meant 44% of Top 100 firms actually suffered a fall in profits. So going forwards, firms will need to consider cost control in the context of more radical changes to their future operating model and innovative thinking as to how and where services are delivered.

Two thirds of Top 100 firms expect that GenAI will ultimately have a positive impact on margins and revenue. However, investment in Cloud is a top priority with many firms still lacking the fully unified data platform which is essential to leverage AI to its maximum potential.

Working capital was identified as the top priority for business support over the next year. Lock up days have worsened at a time when firms need funding both for technology investment and for accelerated tax payments as a result of basis period reform.

To find out more about how firms can best respond to the challenges ahead please download our latest Law Firms’ Survey.