Written by: Keith Tully
A sizable majority of high street law firms are fearful that they might be forced to close their doors over the next six months.
Research by the Law Society recently found very widespread and often serious cash flow problems in evidence among small-scale legal practices operating across England and Wales.
These firms saw a very sharp drop in income as the coronavirus crisis hit and as the UK entered a period of lockdown.
Many high street law firms are still open for business but finding it extremely tough to carry out their work as normal, with court hearings having been scaled back and residential property transactions having ceased almost entirely.
Meanwhile, carrying out the execution of wills has also become a much more difficult process because face-to-face meetings cannot generally take place and social distancing has created all kinds of practical problems.
Another issue for high street legal practices has been a slowing down of activity and requests for work among businesses in the retail, leisure and hospitality industries.
Large numbers of small law firms, meaning those with four partners or less, are now worried that their liquidity will soon dry up to such an extent that they can no longer stay in business.
“Though the government support will provide some relief, there is a growing fear that many businesses will fall through the cracks,” said the Law Society’s president Simon Davis.
“The exclusion of many solicitors from support for the self-employed mean that many are struggling,” he added.
Mr Davis noted that small scale legal practices are generally still expected to pay their business rates during the lockdown period despite the fact that their buildings are largely being left empty and their work has dropped off very sharply as a direct result of the crisis.
The Law Society hopes to see more financial support being extended to small law firms in the coming weeks.
“Small firms are often at the heart of their communities,” said the Law Society’s president in a statement. “It is vital they survive the crisis to play a role in getting the economy back on its feet.”
28th July 2021
The number of UK companies in positions of ‘significant financial distress’ were up 24 per cent at the end of the June 2021, as compared to the same point of last year.Read More
22nd July 2021
The Confederation of British Industry (CBI) has called for an “immediate rethink on self-isolation rules” to help businesses manage their workforces as the economy reopens and recovers.Read More