MANAGING partners throughout Merseyside say the global credit crunch is affecting the financial performance of the region’s law firms, but remain upbeat about the rest of the year.
In a survey conducted for Management Partners Merseyside by Exchange Chambers, 95% of those questioned said the credit crunch was having a negative impact on financial performance.
Jonathan Brown, head of Halliwells’ Liverpool office, said: “Our corporate deal flow has increased over the last few months, with companies wanting to complete deals before the April capital gains tax deadline, but with the banks now adopting a more cautious approach deal activity is sure to decline. How- ever, in a downturn, other prac- tice areas such as corporate recov- ery, litigation and employment become busier, so it’s not all bad news.”
Patrick Gaul, managing partner at Weightmans, said: “Raising the money to run any business will become more expensive and many law firms are now very big busi- nesses. There will be less confid- ence within the business community.
“Firms who are heavily reliant on certain areas of business, for example residential conveyancing and corporate mergers, will have to adapt. If they don’t, the impact will be severe.”
He added: “Recession, if that is what we are about to have as a result of the crunch, may have a positive impact for some legal businesses, and those with strong litigation or restructuring capabilities will prosper.”
Kingsley Hayes, legal director at Silverbeck Rymer, believes the credit crunch could actually boost business for some firms. He said: “The personal injury sector has tended to see an increase in business in times of recession.”
Garry Abrams, managing partner at EAD, says residential conveyancing work has dropped off, but he remains optimistic.
He said: “Personal injury work is largely recession proof, but the residential conveyancing market has really slowed down.
“Firms specialising in a broad spread of work will not be massively concerned, but firms too heavily dependent on, for example, big private equity deals or stock market flotations will certainly be feeling the pinch.”
Peter Jackson, managing partner at Hill Dickinson, believes firms focusing on litigation can expect a busy period.
He said: “A large part of our business is litigation-based and, of course, litigation booms in any downturn or recession.”
Tom Handley, director of Chambers at Exchange Chambers, said: “It is clear law firms throughout the region are well equipped to weather the current economic storm.”
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