Revenues rebound by 20% in June, but still down on last year
Written By - Ali Hameed - August 13,2020
Revenue rebound by 20% in June, but still down on last year
Latest official economic statistics show that legal sector revenues grew strongly in June - but were still well down on the same month last year. However the sector's downturn is far less severe than that of the economy as a whole.
According to Office of National Statistics data released today, the UK legal industry generated revenues of £2.79bn in June 2020, 19.5% up on the previous month. As May is traditionally the weakest month for the legal sector, some growth had been expected. However this was a stronger rebound than that shown by the economy as a whole, which grew by 8.7% in the same period. The overall services sector, including legal, grew by 24.5% in June.
The comparison with June 2019 is less cheerful, however, with revenues down by 3.6% from that month, which was the highest billing June on record.
Overall gross domestic product fell by 20.4% in the quarter April-June 2020, the ONS revealed today. As this is the second consecutive quarter of decline, the UK economy is technically in recession.
Market watchers cautiously welcomed signs of recovery. Louis Young, managing director of litigation funder Augusta, said: 'June’s revenue data shows the green shoots of recovery are now here for the UK’s legal industry. Firms will welcome this news, having been hit hard by the pandemic. Many will however take time to recover, having geared up for a record year in 2020. Leaders continue to look for options to manage costs and enhance their balance sheets, whilst planning for an improvement in trading conditions in Q3'.
Law Society president Simon Davis said the June data reflects deals which started before lockdown and were billed in June. 'Our survey, from the beginning of the Covid-19 pandemic, painted a less optimistic picture of the impact on firms’ business showing that the sector has been significantly affected by loss of income and cashflow concerns. Solicitor firms will play a key part in the country’s recovery from coronavirus and in rebuilding the economy, but they will need adequate support to do so.
'Many firms, particularly in the legal aid sector, need further UK government support urgently.'
By Michael Cross