The legal sector’s unadmitted threat to ‘London weighting’

Law firms and consultants of all types who advise them are very keen to talk about ‘the post-Covid world’. Anyone with the strength to wade out past the articles on Martin Bashir and princess Diana, which stretch almost the horizon today, will find a lot of ‘thought leadership’ pieces on hybrid working arrangements and the future of the legal sector.

There are interesting things happening around property too. London, its City skyline bedecked with statement office blocks, is bottom of the league for increases in house prices for the past year. It seems that folk who don’t share my love of London, but live here just for work, are looking to move further out.

And for lawyers and support staff who have kept their jobs, the resilience of the legal sector economy may mean that they are among the financial winners from the lockdowns and restrictions of the past year. They are not spending on season tickets, £5 sandwiches, restaurants or foreign holidays.

I was looking for a new suit at the start of March last year. Instead that money’s stayed in my bank account, and it’s the same for many others.

Looked at this way, the post-Covid future is all about opportunity – a chance for professionals to work in a way better adapted to the interests and demands of their home life, using the office only when they need to. There is a chance to be less stretched by our commitments.

All this is, though, leading many law firm leaders to consider something none of them are talking about publicly.

If remuneration and benefits of all sorts are connected to the ‘old’ way of working, can they be cut?

If your people are not in Barnes, but have in fact upped sticks to Alnwick or Dungeness, should their role attract a London weighting just because that’s where the HQ is?

Even our most gilded law firms run a tight ship when it comes to finances, where apparently modest discretionary spend can be hard to clear. And of course, lower spend on staff means more for equity partner profits.

‘I don’t want to be quoted on this, but we are looking at London weighting,’ several managing partners have said to me. It is not just London where this logic is being applied. Any cost of living element can be under consideration.

If we look beyond a probable consumer boom from pent up demand – in part achieved using the London weighting money so many have saved – then the economy may not be in great shape. It is functioning under the artifice of unsustainable public spending levels, and as the knock-back to the UK on attempted accession to the Lugano convention underlines, the UK’s trading position on goods and services is far from settled.

In that context, if law firms can save not just on office space, but also on remuneration and benefits, then many will be tempted to do just that.