Legal Market in Times of Crisis. UBA Review

2020-05-18

KYIV - May 18, 2020. The quarantine is finally coming to an end – staring from May 11, the restrictions are gradually easing in Ukraine. Presently no one can confidently answer a "What's next" question, so we decided to find out: “What’s now?”.

We conducted an anonymous online survey among law firm partners and their teams to measure the dynamics of changes in the legal market during the crisis. The results of the voting will be discussed within the Partners Club to determine the vector of further actions and ways of development, taking into account the identified forecasts.

In the meantime, we are ready to talk about the first results.

Preface. Activity of respondents

The most active in the process of measuring market temperature was the central region, which concentrates key companies in the country - 34.1% of the total number of respondents. Western region holds the second place, followed by north, south and east.

Results. The general picture

The results of the survey showed the general condition of the legal market at the time of the weakening of quarantine measures. The resulting picture allows us to draw the first conclusions about how the legal market reacted to a sudden, quarantined storm. We tried to cover each of the key parts of the company's activities: relationships with partners and clients, HR policy, financial condition, marketing and communications, and separately - the remote work format.

It turned out that a large number of lawyers have long been waiting for the crisis, but no one expected that its catalyst would be a pandemic.

More details

Partners & Clients

Regarding the demand on legal services, almost half of respondents unanimously stated a reduction in proposals up to 50%, and 19.5% of respondents said they had more than halved. In a third of companies, everything remained unchanged (29.3%), and a small percentage of partners even increased the number of clients. The cost of services remained unchanged - only 19.5% of respondents reduced prices.

Client orientation

The vast majority of respondents resorted to such a policy, developing special conditions for clients: discounts, bonuses, payments in installments, etc.

The solutions turned out to be very successful, meeting the expectations of clients in times of crisis:

Evolution of clients’ requests in times of transformation

In the conditions of the personnel earthquake caused by quarantine, the leader in terms of inquiries from among all spheres became labor law. The TOP-3 also includes tax advice and criminal law. And the third place can be safely given to two other areas: business protection and litigation.

Born of crisis

We also learned about new practices and tools introduced during quarantine. These include Coronavirus Legal Protect (compliance with pandemic legal restrictions), mailing legal updates on COVID legislative changes, and online counseling. Considerable attention was paid to the issue of force majeure.

Finances

The majority of respondents noted a significant negative impact of the crisis on the company's financial condition - only 39% still remain stable. Profit decreased in 73.2% of the market. For 22% it remained unchanged and almost 5% managed to increase payments.

The adapted approach in payments was divided into temporary reduction, hourly pay and focus on the sphere of activity of the client assigned to the employee, and the professionalism of the latter.

The rental payments of a significant number of respondents remained unchanged (37.5%), the same number were forced to settle issues with the property owner for the quarantine period.

Finally, taking into account all the measures taken to reduce costs, only 39% of the legal market have “safety  pillows" for a period of 3 to 6 months. As for the rest, the picture is sadder.

Marketing

Contrary to the advice of the leading marketers of the legal market, more than half of the surveyed partners decided to reduce costs on communication and marketing costs. Almost 40% of respondents managed to save the budget and only a small part - to increase it.

Remote work format

Contrary to the forecasts from Iryna Nikitina, a strategy and development consultant, according to the LegalTalents.Report, only half of the legal market has gone online. Most companies work in 50/50 mode - some employees are in the office mode, some perform remotely. Only 34% of respondents went online completely, and 12% did not leave the office at all.

The attitude to the online format was divided in a similar way - with a small margin of 3%, its supporters won.

What's next? Remote format or office?

The answers vary. The majority of respondents opposed the online for future.

What in the end?

Online has confidently won a significant share of the market, becoming an equivalent competitor to offline. The world has definitely undergone significant changes, however, the dynamics and vector of their development will become clear only over time, as well as the end result of the division of the world into virtual and real.

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