The proportion of law firm leaders saying they expect to reduce their need for office space has risen by nearly half over the past year, according to a bank’s regular snapshot of the sector. However the latest HSBC Investment and Growth Strategies in Law Firms report published today, firms remain bullish about the near future. 

HSBC's report is based on an online survey carried out between May and July - before the current outbreak of economic uncertainty. It attracted 76 responses from firms ranging in turnover from £18m to £1bn+.

According to the report, half of respondents say their firms are planning to reduce the amount of space they occupy within three years – an increase from 35% saying that this was part of the strategy in 2021. Two-thirds say they continue to repurpose their remaining office spaces for more collaborative/hybrid working, and 29% say they have already achieved the reduction they need – an average cut of 13% in space. 

Nearly three quarters (70%) of respondents said they expect increased merger and acquisitions activity affecting law firms over the next 12 months as a result of disruption or decisions during the pandemic. However the survey showed little appetite for new business models: 8% of respondents said their firm is likely to be a public limited company by 2027.

Just over three-fifths (61%) of the responding firms already had an international presence at the time of answering, approximately the same proportion as in 2021. Among this group, 58% said their strategy for 2022/2023 is to continue expanding internationally – up from 52% reporting this in 2021. Only 11% said their firms would either be freezing or reviewing their growth plans, with none suggesting a need to move out of international markets.

However, among firms that don’t yet have an office outside the UK, only 3% of leaders said the current strategy includes internationalisation – down from 11% in 2021.

When asked which of a list of market trends/forces present the greatest potential for disruption at the firm, the frontrunner was 'peer firms with more tech-driven business models'.

Chloe Clift, head of professional services sector for HSBC UK Commercial Banking, said: 'Law firms have got their eyes firmly fixed on the future. We are having frequent conversations about growth opportunities both home and abroad, with M&A, hiring and implementing new technologies front of mind for many clients.'