26
CommBank Legal Market Pulse Conducted by Beaton Research + Consulting Quarter 2 2014/15
CommBank Legal Market PulseConducted by Beaton Research + Consulting
Quarter 2 2014/15
1
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Contents
Long term positivity remains despite confidence softening 2
Economic outlook 3
Snapshot of survey findings 4
Firm StructureOffice locations 6
Primary practice areas 6
Business conditionsPerceived performance of the Australian economy 7
Perception of business conditions - present to 2017 7
Perception of business conditions - by area 8
Business prioritiesMarket entry and exit 9
Revenue predictionsChanges in revenue over the next 6 months – by location 10
Changes in revenue over the next 6 months – by practice area 11
Realised rates and fee structureExpected changes in realised rates over the next 6 and 12 months 13
Alternative price structure revenue 13
Expense and profitability predictionsChanges in expenses over the next 6 months 14
Changes in staffing over the next 6 months 15
Change in operating margins over the next 6 months 16
Provision of non-legal servicesProvision of non-legal services 17
Revenue from non-legal services 17
Potential revenue from non-legal services 18
Geographic expansion planningLikelihood to expand geographically 19
Potential expansion locations 19
Ways of geographic expansion 20
Investment in technologyAdoption and usage of technologies 21
Return on technology investment 21
Changes in level of technology investment 22
Use of technology to analyse profitability 22
Rise in project managementProject management training 23
Recruitment of project managers 23
Diversification of suppliers Diversification of suppliers across business areas 24
2
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Marc Totaro National Manager, Professional Services Commonwealth Bank
Welcome to the second quarter edition of the CommBank Legal Market Pulse for the 2014/15 financial year, conducted in partnership with Beaton Research + Consulting.
During the quarter we witnessed a softening of the steadily climbing trend in confidence seen throughout 2014. While confidence has moderated, it is encouraging to see the perception of business conditions will likely move into positive territory in the next 12 months.
One element underpinning subdued confidence is a reduction in the number of firms reporting a positive outlook of the Australian economy. The survey reveals many law firm leaders believe there may be a downturn in the broader economy over the next 12 months, a view held by both top and mid-tier firms.
Despite this, firms are anticipating net revenue increases in every geographical location in the next six months. In addition, expectations of an increase in revenue have improved across Asia, Adelaide and Canberra. Amongst practice areas, firms are expecting strongest revenue gains in government, IT, telecoms and media and insolvency and restructuring.
“Firms are anticipating net revenue increases in every geographical location in the next six months”Encouragingly, the survey also reveals almost one in three firms are seeking to expand geographically by opening new offices, with Perth, Brisbane and Canberra the most likely locations for expansion.
When looking at the variation between top and mid-tier firms, there are a number of notable differences. The negative short-term outlook is more pronounced amongst mid-tier firms, however these firms are more optimistic about conditions in the longer term compared to top-tier firms.
In terms of hiring expectations, top-tier firms are likely to increase employment of senior associates, senior lawyers and junior lawyers in the next six months while decreasing salary partner numbers. Conversely, mid-tier firms are looking to increase salary partner numbers. Additionally, top-tier firms expect realised rates to decrease and remain flat in the next 12 months, whereas their mid-tier counterparts expect an increase.
In this quarter’s survey, we focus on technology utilisation and the commercial benefits derived by firms. Generally the majority of firms believe the pace at which they are adopting new technologies is at the same or faster pace than their international counterparts.
In an encouraging continuation from the last technology spotlight in the June quarter 2014, 73 per cent of law firms who have adopted new technologies have seen a return on investment, top-tier firms even more so than mid-tier firms. It is therefore not surprising the majority of law firms are looking to increase the level of investment in new information and communications technologies over the next six to 12 months.
“73 per cent of law firms who have adopted new technologies have seen a return on investment, top-tier firms even more so than mid-tier firms”When looking at specific technologies being implemented by law firms, those increasing efficiency and productivity (such as document automation and e-Discovery software) are seen as most valuable. These technologies can assist with cost reduction as firms strive to preserve margins and retain work.
I trust you will find this edition of the CommBank Legal Market Pulse informative and useful for your firm’s planning and benchmarking. We look forward to continuing to monitor the legal industry’s sentiment and performance, and sharing these insights with you.
Email: [email protected] Tel : +61 2 9303 1940
Long term positivity remains despite confidence softening in the December quarter
3
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Diana Mousina Associate Director Economics Commonwealth Bank
The latest Australian GDP growth figures in the third quarter of 2014 were weaker than expected. Annual growth is tracking at a below-trend 2.7%pa. In line with slower growth, legal firms have reported a drop in overall business conditions. The outlook around the Australian economy and the legal industry broadly also softened (but still remains positive). This was the first drop in reported business confidence for twelve months. Current conditions have softened more in mid-tier firms than in the top-tier firms.
Income growth in the economy is running at exceptionally weak levels. The significant decline in commodity prices over 2014 is the main reason behind this weakness. A lack of income has pushed consumers to defer spending and increase savings, businesses to defer or cancel capital spending and labour hiring and governments to tighten the fiscal screws. Weakness in income growth is evident across numerous business and consumer sentiment surveys.
New sources of income are needed. Resource exports are the most likely source. The production stage of the mining boom is firmly on track. Resource exports are currently a significant driver of GDP growth and will continue to be as further iron ore mines and Liquefied Natural Gas (LNG) plants finish construction over the next two years.
The forward looking indicators of growth are pointing to a more positive picture of the economy. The residential construction upturn is firmly entrenched. The labour-intensive nature of this sector will be positive for jobs growth. Mining related job losses are currently being more than offset with jobs related to rising dwelling investment. The latest data shows the unemployment rate has now dropped back to 6.1%. Trends in job vacancies data and business surveys of hiring intentions have been consistent with a downtrend in the unemployment rate for some time now. Jobs growth looks like it will be based in the construction sector (both residential and non-residential) and service industries like health and education.
The law firms surveyed in the CommBank Legal Market Pulse have mixed forecasts for staff numbers. The number of shared service staff and secretarial and admin staff numbers are expected to decline at a faster rate than previously reported. But the number of fixed share/salary partners and senior associate numbers are expected to grow at a faster rate compared to the last survey. Graduate numbers are still expected to grow, but at a slower rate than previously forecast.
The Reserve Bank of Australia (RBA) has had a neutral policy stance since February. Overall, the outcomes the RBA was looking to engineer have occurred. The desired growth transition is underway and the Australian dollar has depreciated significantly, now trading at USD0.82. A lower currency will provide significant stimulus to growth. However at the same time, there are now renewed threats to the global outlook and the slide in oil prices have added fuel to the fire. Inflation in Australia should remain within the RBA’s 2-3% inflation target band because of lower oil prices and also as below-trend domestic growth keeps inflationary pressures restrained. The RBA is expected to keep the cash rate on hold over 2015. We still see the need for higher interest rates in early 2016.
Economic outlook
4
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Summary of Q1 FY2015 findingsSnapshot of survey findings
100%
Perception of business conditions
-17 -26
23 10
63 29
100
50
0
50
100
Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15
At the moment Likely to be in 12 months' time Likely to be in 2 years' time
Net % (positive - negative)
Top 3 business challenges
81% Negotiating price with
clients 55%
Winning new
business
55% Competing with other
firms
Asia
Net % (increasing – decreasing)
UK / Europe
Brisbane
89%
67%
52%
Geographic areas with highest revenue growth expectations
Government
Net % (increasing – decreasing)
Construction, engineering and major infrastructure
IT, telecoms and media
55%
Practice areas with highest revenue growth expectations
55%
55%
Expected changes in realised rates
+0.3% +1.0%
Next 6 months
Next 12 months
Junior lawyers Fixed share / salary partners Senior Associates/ lawyers Equity partners Paralegals
Shared service staff Secretarial and admin staff
Changes in staff numbers
5
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Expenses forecast
IT hardware and software
Net % (increasing – decreasing)
Staff training and development
Marketing and business development
Library and knowledge management
Telecommunications
Professional indemnity insurance
Occupancy
Likely locations for expansion
Perth
Brisbane
Canberra
40%
30%
30%
Likelihood of revenue increase from non-legal services
31%
54%
Next 12 months time
Next 2 years time
Top 3 technologies implemented and used
Mobility solutions
Document automation
E-Discovery software
Recruitment of project managers
26% 4%
88%
Total Top-tier firms
Mid-tier firms
% of firms which have recruited project managers
Snapshot of survey findings
6
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Firm Structure
Office locations
Firms believe there may be a downturn in the broader economy over the next 12 months. This is consistent across both top and mid-tier firms.
81 74
68
52
29 29 26 26 19
0
20
40
60
80
100
Sydney Melbourne Brisbane Perth Canberra Asia Other Adelaide UK / Europe
%
Primary practice areas
65 65 65
71 71 71 74 77 77
84 84 87 87
97 100
0 20 40 60 80 100
Government
Insurance
Taxation
IT, telecoms and media
Construction, engineering and major infrastructure (including project
Other general commercial work
Energy and resources
Intellectual property (including PTA and IP disputes)
Competition, consumer law and trade practices
Banking and finance (including funds management)
Insolvency and restructuring
M&A and corporate advisory (including capital markets)
Employment, workplace and OH&S
Property, environment and planning
Litigation and dispute resolution
%
Expenses forecast
IT hardware and software
Net % (increasing – decreasing)
Staff training and development
Marketing and business development
Library and knowledge management
Telecommunications
Professional indemnity insurance
Occupancy
Likely locations for expansion
Perth
Brisbane
Canberra
40%
30%
30%
Likelihood of revenue increase from non-legal services
31%
54%
Next 12 months time
Next 2 years time
Top 3 technologies implemented and used
Mobility solutions
Document automation
E-Discovery software
Recruitment of project managers
26% 4%
88%
Total Top-tier firms
Mid-tier firms
% of firms which have recruited project managers
7
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Business conditions
Perceived performance of the Australian economy
Firms believe there may be a downturn in the broader economy over the next 12 months. This is consistent across both top and mid-tier firms.
-32 -38 -30
-45 -50
-43
23 13
26
-22.6
-37.5
-17.4
-100
-80
-60
-40
-20
0
20
40
60
80
100
Total Top tier Mid tier
%
Neutral Negative Positive Net % (positive-negative)
Perception of business conditions – present to 2017
Mid-tier firms have a negative short-term outlook, however are more optimistic about conditions in the longer term compared to top-tier firms.
-17 -26
23 10
63
29
0
-13
13 0
75
25
-23 -30
27 13
59
30
-40
-20
0
20
40
60
80
100
Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15
At the moment Likely to be in 12 months' time Likely to be in 2 years' time
(po
sitiv
e –
nega
tive)
Mid tierTop tierTotal
%
8
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Perception of business conditions - by area
Business conditions remain challenging across most business areas. Negotiating price remains the key challenge which has further deteriorated from last quarter. Firms are, however, finding it less challenging to win new business and keep staff fully utilised.
40 39
-13 -13 -17 -23
-17 -26 -27
-42
-60
-45
-70
-55 -57 -55
-73 -81
-100
-80
-60
-40
-20
% 0
20
40
60
Q1 FY15
Q2 FY15
Q1 FY15
Q2 FY15
Q1 FY15
Q2 FY15
Q1 FY15
Q2 FY15
Q1 FY15
Q2 FY15
Q1 FY15
Q2 FY15
Q1 FY15
Q2 FY15
Q1 FY15
Q2 FY15
Q1 FY15
Q2 FY15
Accessingcapital
Keeping qualitystaff
Finding qualitystaff
Collectinginvoices
Keeping staff fully
utilised
Winningnew
business
Competingwith other
�rms
Negotiatingprice with
clients
Keepingexpenses
under control
9
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Business priorities
Market entry and exit
The three main practice areas in which top-tier firms are looking to increase their investment are construction, engineering and major infrastructure.
50
25 25 25
13
-13-20
-10
0
10
20
30
40
50
60
70
80
Constr
uctio
n, en
ginee
ring
and m
ajor in
frastr
uctur
e
M&A and c
orpo
rate a
dviso
ry
(inclu
des c
apita
l mark
ets)
Govern
ment
Bank
ing an
d fina
nce
(inclu
des f
unds
man
agem
ent)
Compe
tition
, con
sumer
law
and t
rade p
ractic
es
Insur
ance
%
Top-tier firms
Planning to exit/ significantly reduce investment
Planning to enter/ significantly grow investment
Conversely, mid-tier firms are looking to increase investment in government, employment, workplace and OH&S and property, environment and planning.
43 39 3935
2622
13 13 13 13 13 94 4 4
-9-4
-20
-10
0
10
20
30
40
50
60
70
80
Govern
ment
Emplo
ymen
t, wor
kplac
e and
OH&S
Prope
rty, e
nviro
nmen
t and
plan
ning
Bank
ing an
d fina
nce (
includ
es fu
nds m
anag
emen
t)
IT, te
lecom
s and
med
ia
Insur
ance
Constr
uctio
n, en
ginee
ring a
nd m
ajor in
frastr
uctur
e
Litiga
tion a
nd di
spute
reso
lution
M&A and c
orpo
rate a
dviso
ry (in
clude
s cap
ital m
arkets
)
Intell
ectua
l pro
perty
(inclu
des P
TA an
d IP d
ispute
s)
Taxa
tion
Other g
enera
l com
mercial
wor
k
Compe
tition
, con
sumer
law an
d trad
e prac
tices
Insolv
ency
and r
estru
cturin
g
Energ
y and
reso
urce
s
%
Planning to exit/ significantly reduce investment
Planning to enter/ significantly grow investment
Mid-tier firms
10
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Revenue predictions
Changes in revenue over the next 6 months - by location
The overall decrease in revenue expectations in Sydney is attributed to mid-tier firms, as more top-tier firms expect revenue to increase rather than decrease. The opposite applies to Melbourne where top-tier firms are driving the decline.
Total Top tier Mid tier
54
40 47
31
52
30
-13
25
50
88
43
29
57
14
0 0
56
18
50
33
50
38
-14
29
-40
-20
0
20
40
60
80
100
Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15
Sydney Perth Melbourne Adelaide
%
70
89
100
67 71
86
100
67 67
100 100
-40
-20
0
20
40
60
80
100
Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15
Asia UK / Europe Brisbane Canberra
Total Top tier Mid tier
%0 0
57 52
22
44
86
71
25 33
43 43
20
50
11
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Changes in revenue over the next 6 months - by practice area
Top-tier firms expect a greater increase in revenue in IT, telecoms and media and insolvency and restructuring compared to the previous quarter. Mid-tier firms expect a greater increase in revenue in government, IT, telecoms and media and litigation and dispute resolution.
28
55 67
55
33
55 56
37 32 33
71
57 63
50 38
63 75
88
43 43
0
54
69 57
31
50 47
16 28 29
-40
-20
0
20
40
60
80
100
Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15
Government Construction, engineeringand major infrastructure
IT, telecoms and media M&A and corporate advisory
Intellectual property
Total Top tier Mid tier
%
20 32
56
30 40
27 22 20
31 20
50 50 57
29 25 25 25 25 13 13 9
26
55
30
47
28 20 17
38
23
-40
-20
0
20
40
60
80
100
Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15
Litigation and dispute resolution
Employment, workplaceand OH&S
Banking and �nance Taxation Property, environmentand planning
Total Top tier Mid tier
%
12
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Changes in revenue over the next 6 months - by practice area (continued)
33
17
41
15
-4
12
36
5 9
-30
63 63
0
-25 -14
14
0
-20
13
-25
19
-6
50
25
0 11
44
12 7
-33 -40
-20
0
20
40
60
80
100
Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15
Competition, consumerlaw and trade practices
Insurance Insolvency and restructuring
Other generalcommercial work
Energy and resources
Total Top tier Mid tier
%
13
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Realised rates and fee structure
Expected changes in realised rates over the next 6 and 12 months
Top-tier firms expect realised rates to decrease and remain flat in the next 12 months, whereas their mid-tier counterparts expect an increase.
Total Top tier Mid tier
0.8
0.3
1.1 1.0 1.1
-0.4
1.4
0.0
0.7 0.5
1.0
1.3
-1
0
1
2
Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15
Next 6 months Next 12 months
Mea
n %
Alternative price structure revenue
Firm revenues from alternative price structures remains unchanged from last quarter, totalling 28%. The expected increase to 35% over the next 12 months is also in line with last quarter’s findings.
2310
32
35
29
23
13
26
3 6
28.2
34.5
0.0
10.0
20.0
30.0
40.0
50.0
0
20
40
60
80
100
At the moment Likely to be in 12 months' time
Mea
n %
%
Between 60% and 74% Between 45% and 59% Between 30% and 44%
Between 15% and 29% Between 1% and 14% Average %
14
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Expense and profitability predictions
Changes in expenses over the next 6 months
Top-tier firms are forecasting tighter expense control than mid-tier firms across most areas, with the exception of marketing and business development, professional indemnity insurance and telecommunications.
Total Top tier Mid tier
33 35 27
19
37
19
-7 -3
25 25 25
13
25
38
-13 -13
36 39
27 22
41
13
-5
0
-40
-20
0
20
40
60
80
100
Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15
IT hardware and software
Staff training and development
Marketing and business
development
Occupancy
%
-20 -13
-20 -13 -13
-19 -13
0
-13
0
-50
-25 -23 -17
-23 -17
0
-17
-60
-40
-20
20
0
40
60
80
100
Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15
Professional indemnityinsurance
Telecommunications Library and knowledgemanagement
Total Top tier Mid tier
%
15
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Changes in staffing over the next 6 months
Top-tier firms are likely to increase their number of senior associates, senior lawyers and junior lawyers in the next 6 months and decrease salary partner numbers. Meanwhile, mid-tier firms are looking to increase salary partner numbers.
7 6 13
26
13 16
50
26
0 0
-13 -13
-25
13
38
13 9 9
23
39
27
17
55
30
-40
-20
0
20
40
60
80
100
Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15
Equity partner numbers Fixed share /salary partner numbers
Senior Associates /senior lawyers (4th year+)
Junior lawyer numbers (Graduates – 3rd year)
Total Top tier Mid tier
%
Total Top tier Mid tier
-7
-26 -23 -29
7 6
-13 -25 -25 -25
0
-13 -5
-26 -23 -30
9 13
-40
-20
0
20
40
60
80
100
Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15
Shared service staff numbers Secretarial and admin staff numbers Paralegals
%
16
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Change in operating margins over the next 6 months
A greater proportion of top-tier firms are forecasting an increase in operating margins over the next 6 months compared to mid-tier firms.
27 23 13
50 32
13
0
20
40
60
80
100
Q1 FY15 Q2 FY15
Total Top tier Mid tier
%
17
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Provision of non-legal services
Provision of non-legal services
The provision of non-legal services remains unchanged from last quarter, with around 50% of law firms offering these services. This trend is more prevalent among top-tier firms.
53 58
2538
64 65
47 42
7563
36 35
0
20
40
60
80
100
120
Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15 Q1 FY15 Q2 FY15
Total Top tier Mid tier
%
Yes No
Revenue from non-legal services
While 1 in 2 firms offer non-legal services, they continue to represent a very small proportion of overall firm revenue, particularly for mid-tier firms.
3820
50
31
20
38
23
40
13820
1.5
3.0
0.6
0.0
1.0
2.0
3.0
4.0
5.0
6.0
0
20
40
60
80
100
Total Top-Tier Mid-Tier
%
Mea
n % 1%- < 5%
0.5% – < 1%
< 0.5%
Mean
5% or more
18
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Potential revenue from non-legal services
However, over half the law firms surveyed believe revenue from non-legal services will increase over the next 2 years.
-69-46
23 468
8
30.8
53.8
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
-80
-60
-40
-20
0
20
40
60
80 In 12 months' time In 2 years' time
Mea
n %
%
Remain the same Increase Increase significantly Net % (increasing - decreasing)
19
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Geographic expansion planning
Likelihood to expand geographically
2 out of 5 mid-tier law firms are looking to expand geographically, whilst the majority of top-tier firms are not looking to do so.
Yes Don’t know
32
13
39
61
75
57
6 13 4
0
20
40
60
80
100
Total Top tier Mid tier
%
No
Potential expansion locations
Among the firms looking to expand geographically, Perth, Brisbane and Canberra are the likeliest locations.
40.030.0 30.0
10.0 10.0 10.0 10.0
0
20
40
60
80
Perth Brisbane Canberra Darwin Melbourne Sydney Europe
%
20
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Ways of geographic expansion
Firms are most likely to expand into new geographies by recruiting employees from competitors in the new location.
70.0
40.0 40.030.0
20.0
0
20
40
60
80
Recruiting partners and staff from competitors in the new location
Relocating partnersand staff from
existing offices
Establishing a completely new office
Merge with anexisting firm
Strategic alliance with an existing firm
%
21
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Investment in technology
Adoption and usage of technologies
Document automation and mobility solutions are the main technologies law firms have implemented and used.
Implemented and frequently use Implemented but seldom use Currently implementing
Looking to implement Not implemented
3
42
23 2313
32
3
35
6
13
23 26
19
29
10
16
23
1013 10
6
3
23
16
10
10
316
19
23
3
658
2639
2642
13
61
26
0
20
40
60
80
100
Document automation
Cloud basedcomputing /
storage
Collaborationsoftware (to
perform tasks like annotatingdocuments)
Dataanalyticssoftware
E-Discoverysoftware
Enterprisesocial mediaplatforms (eg
Yammer)
Mobility solutions
Web basedCRM software
(eg SalesForce)
%
Return on technology investmentThe majority of law firms who have adopted new technologies have seen a return on investment, top-tier firms even more so than mid-tier firms.
Yes Don't know (too early to tell)No
7388
67
80
11
19 1322
0
20
40
60
80
100
Total Top tier Mid tier
%
22
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Changes in level of technology investment
With a high proportion having seen returns on investment, it is not surprising the majority of law firms are looking to increase the level of investment in new information and communications technologies over the next 6 to 12 months.
%
3 3
3223
6171
3 3
0
20
40
60
80
100
Next 6 months (compared to last 6 months) Next 12 months (compared to last 6 months)
Increasing significantlyIncreasingAbout the sameDecreasing
Use of technology to analyse profitability
Top-tier firms are more likely to use technology tools to analyse profitably across all levels measured compared to mid-tier firms.
Total Top tier Mid tier
9084
77 74 71
100 100 100 100
888778
7065 65
0
20
40
60
80
100
Practice area Client Office Partner Fee earner
%
23
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Rise in project management
Project management training
Approximately 2 in 3 firms have provided or are planning to provide formal training in project management for lawyers.
3926
35
0
20
40
60
80
100
Provide formal training Planning to provide formal training in the next 12 months
Do not plan to provide formaltraining in the next 12 months
%
Recruitment of project managers
A large majority of top-tier firms have hired full-time project managers. On the other hand, almost every mid-tier firm has never hired one.
Yes No
26
88
4
74
13
96
0
20
40
60
80
100
Total Top tier Mid tier
%
24
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Diversification of suppliers
Diversification of suppliers across business areas
Top-tier firms are more likely to diversify their banking and telecommunications arrangements compared to mid-tier firms.
Total Top tier Mid tier
9487 87
74
65 61
4539
100 100
88 88
75
88
63
38
9183
87
7061
52
39 39
0
20
40
60
80
100
Recruitment IT software Staff contracting agencies
Training and development
IT Hardware Banking LeasingTelecommunications
%
25
COMMBANK LEGAL MARKET PULSE – QUARTER 2 2014/15
Further information
For further insights or information, please contact:
Marc Totaro, National Manager Professional Services
Mobile: 0477 739 315 Phone: +61 2 9303 1940 Email: [email protected] Web: commbank.com.au/legalmarketpulse
For media inquiries, please contact:
Sarah Gibbons, Public Relations Advisor Phone: +61 2 9118 1706 Email: [email protected]
Things to know before you Can: This report is published solely for information purposes. As this report has been prepared without considering your objectives, financial situation or needs, you should before acting on the information in this report, consider its appropriateness to your circumstances and if necessary seek the appropriate professional advice. This quarterly report has been prepared independently by Beaton Research + Consulting and commissioned by Commonwealth Bank. The confidential on-line survey used to prepare this report was undertaken by Beaton Research + Consulting in November to December 2014. The report is based on the views of 31 legal firms across Australia and any opinions, conclusions or recommendations are reasonably held or made, based on the information available at the time of its compilation, but no representation or warranty, either expressed or implied, is made or provided as to the accuracy, reliability or completeness of any statement made in this report. The project was undertaken in compliance with the requirements of ISO 20252. Commonwealth Bank of Australia ABN 48 123 123 124.
About Beaton Research + Consulting
Beaton Research + Consulting is a full-service research firm which offers a full range of solutions for professional services firms, financial services firms and associations. Their expertise includes benchmarking, thought leadership, brand solutions, customised solutions and client satisfaction.
