Big Law

Eurozone Private Sector Returns to Growth


 

So Catch This… Eurozone private sector returns to growth, as UK service sector surges to six-year high

A couple of interesting data points reported in the Guardian:

August 25, 2014, “CBI[1] emphasised the mood of optimism in the overall sector <sic services>, which accounts for about 78% of the economy, pointing out that lawyers, accountants and marketing specialists were being hired in the greatest numbers since before the financial crisis.

In its latest snapshot of the UK services sector, the business lobby group reported that business and professional service firms are feeling more confident about the economy, although almost half are concerned that skills shortages will cramp their expansion plans in the year ahead.

According to the CBI’s survey of 215 firms, 44% of professional services firms said head count was up on the previous three months, while 11% said it was down. The 33% positive balance means that employment has been growing at its fastest pace since November 2007. These employers said they expect hiring to accelerate during the next quarter, putting expectations for employment growth at 46%, the highest since 1998 when the survey began.”

And August 5, 2014, “Markit[2] said that the Eurozone economy has stabilised as the “German recovery accelerates and downturns ease in France, Italy and Spain” Job losses slowed, and business confidence hit a 16-month high.”

Our Take…

When linked together these data points are good news for the Professional Services vertical, especially for the embattled UK legal market that has suffered not only from the financial services collapse, but also the advent of the 2007 legislation Legal Services Act 2007 (the U.K. Act permits entities with non-lawyer owners to provide legal services.)

However, who will benefit from this growth and expansion?  Clearly, the Global 25 will be in the lead… Why?

  • They didn’t just realize all of the financial indicators are there and feel it is time to focus on these sectors;
  • They were out in front, well invested for years, and have been reaping the benefits of that investment; and
  • Trust if they have “skills shortages”, they know how to fix that problem ($$$)

Hmmm…  I guess that is why they are in the Global 25

Further Take…

More to come on this topic, but the cycles we are seeing over the last few years are not remarkable whatsoever in my not so humble opinion.  Some that have not been around this industry for 26+ plus years don’t seem to get it, and espouse the cycle as something new and alarming.

Alarming yes, but not new!  The reality is this is probably the 4th cycle of prosperity, overpaying, economic downturn, financial cuts, firm closures/acquisitions, lateral poaching, lateral departures, Death of the billable hour, etc. etc. etc. that I have experienced in my career in professional services.

From my personal experience, firms that strategically invest in 1) analyzing their practices and providing proper support to the groups that “prime the pump”; and 2) identifying emerging practice areas, have proven time-and-time-again these investments in people, process and technology will have greater future impact than short-term cuts focused on retaining partner compensation levels.

Catch Ya Later…


Written by Michael White

[1] CBI is a UK based lobbying firm comprised of member businesses across multiple verticals

[2] Markit is a Financial Services information company

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