The COVID impact: A positive one for the Australian small law sector

COVID has impacted the business revenue of the Australian small law sector more positively than negatively, and leaves the sector set for considerable growth in 2021, findings from the Smokeball State of Small Law Australia Survey shows.


Some 57% of respondents to the survey saw a positive impact in their business revenue over last year, with technology adoption and the increased appetite for property purchase the key drivers at 92% and 69.5% of positive impact felt respectively, followed by managing staff remotely (64%) and workload (61.6%).


However, 43% saw an overall negative impact on their revenue in the same timeframe. Key negative impacts were felt from delays in the court and legal system (75.6%), burnout (61.5%), work-life balance (49%), productivity (43.7%).


The outlook for 2021 is good as most respondents expect to increase their profitability this year (82%), with most of those expecting to increase between 10 and 15%, and almost one-fifth expecting to achieve more than 20% profit growth.


Of the 17.5% who do not expect growth, more than half expect a profit decline of 5 to 10%, while just over a quarter expect profits to decrease between 20 to 50%.


Hunter Steele, CEO of Smokeball, said: “Conveyancers and property-focused lawyers have certainly been the winners in COVID times, with the huge increase in property purchases and research across the country, particularly in regional areas. Given the current economic situation, this looks set to stay the pace”.


When asked about the biggest challenges they will face this year, there were some very clear pain points with time management being the biggest challenge (56%), followed by client management (45.7%), health and wellbeing of staff (38%), managing costs (34%) and billing and collecting fees (28.5%).


Some of those challenges may arise from the continuation of remote working. While 68% of respondents had flexible work policies pre-COVID, one-third of respondents are unsure or not confident that the small law and conveyancing industry is properly equipped to manage remote working on a long-term basis.


“Managing a remote workforce properly for the business and for staff is not a temporary challenge,” said Jane Oxley, CRO, Smokeball. “Our survey shows that after the vaccine rollout, more than half of firms expect to have a hybrid mix of office and remote work, while 13% plan on still having everyone work remotely. As we settle into the future of work, it’s important to not only maintain productivity and collaboration but also team culture”.


The majority of firms (79%) are not planning on giving up or reducing their office space, with 14% reducing in size and 7% planning to give up altogether. More than half of firms believe nothing is needed to entice staff back to the office (51%), one quarter (25%) believe it will take the vaccine rollout, 10% think it needs more zero transmission days while 13% cannot see anyone coming back to the office.


More than one-third (37%) believe it will take two years to return to a pre-COVID level of normality, with 14% expecting we can do it in six to 12 months, 10% in six months, 8.5% in three months and 8.5% believe it will never return, while 21% do not know.

Worryingly, two-thirds of firms do not believe or are unsure if their billing accurately reflects their firm’s completed work. Only one-quarter of respondents knew what percentage of their time-billed work is billed daily and almost half (46%) estimate they are not billing up to a quarter of their work.

More than a quarter (27%) estimated they are missing billing up to a half of their billable items while 12% estimated it is more than half. Reasons include fixed fee structures, competitive pricing, being time poor, underestimating the time involved and client expectations of a value-add service, as well as the pandemic problem of family demands interrupting work-time.


When asked where they lose most time in their day, administrative work was the top time drainer (35%), followed by emails (25%) and phone calls (24%). In contrast, meetings only accounted for 1% of lost time and documents 4%. Less than a quarter of respondents filled in timesheets as they worked.

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