Summary: With the economy boosting legal demand, British law firms are busy borrowing money to expand, hire lawyers, and invest in technology to improve their services to clients.
An increase in work from mergers and acquisitions has made British law firms borrow more money than ever before in efforts to expand, hire more lawyers, and invest in technology to help them get the jobs done.
Since 2010, there has been a 28 percent increase in bank lending to law firms. Where firms were once required to lay off staff and cut billing rates in an attempt to attract more business, they now have the ability to grow and invest freely.
While banks generally felt secure lending to law firms, the collapse of several U.S. law firms made the weary, making it even harder for the British law firms to recover after the 2010 recession.
One of these banks was Dewey & LeBouef, a New York based firm that aggressively expanded starting in 2007 before filing for bankruptcy in 2012. Three executives plus several other staff are either on trial or already been charged for their involvement of lying to banks and investors for funding. Barclays was one of those banks that millions out on loans to partners at Dewey.
Law firms are very much tied to the economy, with an increase of work when the economy is strong but are forced to rely more on restructuring, litigation, and investigation counsel during the low times. With the economy improving, the numbers show that law firms are too. Many of the top British firms are expanding to new offices in other countries as well as increasing their associates pay.
Some firms are even turning to other sources for funding, such as investments. Gateley became the first British law firm to publicly traded, planning to use their profits on hiring lawyers, aid staff retention, and the acquisition of new firms.
Source: http://www.ft.com/cms/s/0/234dd5f2-440f-11e5-b3b2-1672f710807b.html#ixzz3j7LsU4UD
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