Australia Law Firm Bosses Say Brexit Will Benefit Their Businesses
Approximately 55% of managing partners of Australian firms perceived the UK’s Brexit decision as a positive opportunity for their firms. 15% of this group anticipated that Australian firms would benefit from large corporations seeking investment outside Europe due to Brexit. A senior survey participant mentioned that Brexit would advantage Australian law firms because it could divert attention from major firms like Herbert Smith Freehills and Ashurst, both having a significant presence in Australia.
Nevertheless, 40% of the 20 managing partners who were surveyed felt that Brexit might have a minimal effect on their businesses and clients. One participant stated that global firms could balance out the adverse effects of significant events in one country with gains in other legal markets. Only 5% felt that Brexit would negatively influence the UK segment of their practice, which forms a considerable part of their operations.
Eaton Capital Partners conducted this survey, including responses from notable firms like Allen & Overy, Clyde & Co, Herbert Smith Freehills, Hogan Lovells, Jones Day, King & Wood Mallesons, Baker & McKenzie, PWC Legal, Clayton Utz, and Gilbert & Tobin.
A significant survey outcome was that 75% of respondents felt that big accountancy firms pose a genuine threat to their market share. 35% of Australian managing partners believe the broad international network and combination of advisory and consultancy services offered by accountancy firms appeal to clients. In contrast, 40% felt these firms differ from conventional law firms, which attracts certain clients and lawyers. Only 25% disagreed with this sentiment, with a few feeling that these accountancy competitors lack the depth to handle significant tasks. One partner thought that the Big Four accounting firms had previously attempted and failed to penetrate the legal market and didn’t foresee any changes.
A prominent comment was that top-tier law firms retain a significant edge in drawing top legal talent and are modifying their models to provide a more diverse range of advisory services. Recently, PwC Legal expanded in Australia, adding six new partners in Sydney and Melbourne. This move increased their Australian lawyer count to over 70, with 18 partners, notably just two years after its initial launch in Australia in 2014.
The survey also revealed that Australian firms, much like their UK peers, face increasing challenges from disruptive elements, such as technological advances and NewLaw models. Half of the managing partners identified technological evolution as the most significant change expected in the Australian legal scene in the next five years. The remaining respondents predicted market dominance by global firms (20%) and boutique and specialist firms diverting work from larger full-service firms (30%) as the other primary forthcoming changes.
