4 reasons to feel optimistic about the new financial year

Posted in Latest News on 20 May 2021

The past year has been challenging for many reasons not least the headwinds of Brexit coupled with a global pandemic, I think everyone will be glad to see the back of a year that has affected most of us in a way that we have not seen before in our lifetimes. It has been all too easy to get caught up in the distressing headlines and allow them to permeate our mental health, so here are 4 reasons to feel optimistic about the year ahead.

Economic recovery

Britain is on track for the strongest growth since the second world war this year as it stages a faster-than-expected recovery from the Covid-19 pandemic, according to the Bank of England.

UK economy will be less ‘scarred’ than some of the more pessimistic scenarios outlined. Most obviously, in the labour market. EY expects unemployment to peak at 5.8% in 2021, much better than the 8 to 9% estimates that formed the consensus 12 months ago. This is hugely important, as it suggests we will not have lost skills and capability in significant numbers and should have more scope to bounce back quickly.

Law firm’s performance

Approximately 10% of the year to April 2020 was spent under COVID-19 lockdown and this doubtlessly impacted the financial performance of UK law firms. However, further analysis of the UK financial results does underline the fact most firms weathered the storm well. The majority of Top 100 law firms (70%) reported increases in fee income this year which follows a record breaking year of growth in 2019.

We have been here before

After 63 quarters of expansion, the UK economy got smaller for five quarters in a row in 2008. It took a little time to get back to pre-recession levels however from 2013- 2018 the economy grew to 11% bigger than it was before the recession and unemployment reached a record low. We can fully expect bright times head.

Tough times don’t last, tough people do

The workforce itself has experienced the biggest impact from COVID-19. Very quickly, staff have had to adapt to remote working. Whilst the impact has been severe, law firms have been given an opportunity to fast-track positive cultural changes in areas such as work/life balance, hybrid working, use of office space, diversity and inclusion, mental health, and upskilling staff in digital technologies. With trust under the spotlight due to COVID-19, employers have the opportunity to build trust with their workforce by acting transparently and fairly, shouldering the financial burden whilst protecting jobs so far as possible, and demonstrating their core values of care and community.

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