Legal profits boom in Australia despite COVID-19

New report show Australian law firms have done well – and will continue to do so next year

Legal profits boom in Australia despite COVID-19

Most Australian law firms have prospered in 2020 according to a new report.

While the COVID-19 pandemic has caused considerable disruption and financial pain for many businesses, almost 8 out of 10 law firms said that profits were stable or increased in the 12 months to the end of June 2020 compared the previous 12 month period.

The strong results are part of the latest CommBank Legal Market Pulse, released today, which reveals a mean profit increase of 7% across the sector.

A further boost of 5.5% is expected in FY2021.

The buoyancy of the legal services sector has meant that most firms have retained their workforce, with few changes across all roles.

Digital transformation remains a key focus for firms over the next 12 months while flexible and remote working options are expected to expand across almost all firms, along with enhanced digital services for clients.

Belinda Hegarty, Commonwealth Bank’s national head of professional services, says that the Australian legal services industry has thrived despite the operational and financial disruption of COVID-19.

“We expect to see a continued focus on digital transformation that has followed years of investment in technology within the sector. This will help firms meet client expectations that legal services need to be delivered faster, more cost-effectively and add greater value than in the past,” she said.

One fifth of firms under pressure

The good news isn’t universal though with 21% of law firms reporting reduced profits.

The firms that have shown greatest resilience score well against five criteria: profit growth, maintaining cash flow, managing staff utilisation, adapting to remote work, and ability to compete.

“More resilient firms have clearly led the way in adopting technology. They better understand its potential to help deliver services faster, simpler and cheaper, and to create new products and services. Years of steady investment in this area saw these firms smoothly switch to working remotely and delivering services digitally. Very few less resilient firms could claim the same,” added Hegarty.

Free newsletter

Subscribe to our FREE newsletter service and we’ll keep you up-to-date with the latest breaking news, cutting edge opinion, and expert analysis affecting both your business and the industry as whole.

Please enter your email address below and click on Sign Up for daily newsletters from Australasian Lawyer.

Recent articles & video

Cyber attack targets major firm – report

IP firm strengthens partnership with key hire in Brisbane

Barristers in England and Wales at a “breaking point” – survey

Law Council renews call to raise the minimum age of criminal responsibility

Law reform body recommends changes to SA law and practice

Veteran litigator boosts Simmons & Simmons Hong Kong disputes resolution team

Most Read Articles

Cyber attack targets major firm – report

NewLaw pioneer to lead KPMG Law's legal operations transformation services arm

Baker McKenzie advises US company on cross-border healthtech acquisition

Being a bookworm got this HFW senior associate into the courtroom