Global economic uncertainty will hinder legal demand in the short term: William Josten

The tariff tussle is already impacting transactional practice demand, he says

Global economic uncertainty will hinder legal demand in the short term: William Josten
William Josten

2025 has been shaping up to be a year unlike any other, with international tariff fights making headlines and an air of general uncertainty due to the global political climate.

Last week, Thomson Reuters Institute’s senior manager – enterprise content lead William Josten discussed with NZ Lawyer the findings from the 2025 Report on the State of the New Zealand Legal Market. In the second part of this interview, he shares his top three predictions on the legal profession's performance in the upcoming year and the expected effect of geopolitical uncertainty on the market.

 

You touched on how geopolitical uncertainty could affect the market’s current recovery – how will this impact manifest, in your opinion?  

That’s a really difficult question. 2025 has already seen a huge amount of change, from policies and regulations to global economic turbulence and technology advances. And, the pace of change is not showing signs of slowing down. 
Some challenges, such as supply chain and shipping channel disruptions, are typically priced into the market and therefore may have less demonstrable impact. However, the uncertainty caused by global tariffs and reciprocal measures are more difficult to account for because, to this point, they have been largely unpredictable and rapidly changing. 

We are already seeing global transactional practice demand showing signs of impact from these tariff wars. The longer tariffs remain a hotly contested issue, the more likely it becomes that additional practice areas will be impacted."  

Based on these findings, what are your top three predictions on how the profession will perform in the upcoming year? 

It is difficult to make any predictions with certainty, but a few things seem more certain: 

  • Strong rate growth will be a feature of 2025: New Zealand law firms were aggressive in setting their billing rates going into 2025. Translating this into improved financial performance will be a function of demand for law firm services and the collectability of their billing rates.
  • Global economic uncertainty will cause a short-term bump in demand: The hope would be for that uncertainty to be short-lived for a variety of reasons, but most specifically for law firms to avoid the downside of any potential long-term economic decline. 
  • Another year of strong investment focus on technology: Law firms' and their clients' appetite for AI is growing, as cited in Thomson Reuters Institute’s “Generative AI in Professional Services” report. Investment related to AI and the underlying data infrastructure to support its successful deployment will be key to successfully meet changing client expectations.