denotes premium content | Jul 25 2008 News
posted 30 Apr 2008
Legal survey
Fees for 2008 biggest fear for finance directors
OVER TWO-THIRDS of law firm finance directors (FDs) believe competition over fees will be a “very significant” risk to profitability in 2008.
New research from Sweet & Maxwell shows 68 per cent of FDs are concerned about the issue in 2008, compared to just half of respondents to a similar survey conducted in 2007.
A downturn in M&A and corporate finance work sparked by the ongoing credit crunch was seen as the second most serious risk. Almost half (48 per cent) of FDs classed such a cyclical downturn a “very significant” threat, compared to just over a third (36 per cent) a year ago.
On the other hand, the availability of litigation work is now seen as less of a business risk. Under a quarter (24 per cent) cited a “downturn in litigation” as a significant threat to profitability, down from 32 per cent at the previous count.
Spiralling lawyer salaries are also seen as less risky in the current economic climate; the number of FDs seeing its impact on profitability as “very significant” falling from 36 per cent to 32 per cent.
Other key risks highlighted by the 2008 survey included late payment by clients (28 per cent) and increased risk of professional negligence claims (24 per cent).
