2022: a year for lawyers?

Having said goodbye to the disruption of 2021, we’re all now having to recognise that various mutant strains of Covid-19 are likely to continue disrupting our lives and businesses into 2022.

However, given that what we’ve experienced has been the largest global peacetime disruption for over 100 years, it’s appropriate to reflect on how well the legal market has performed in such challenging times. Unlike other sectors, working from home has been effective, and both firms’ revenue and profitability have generally proved to be robust. We are performing so much better than other sectors of the economy and we need to be grateful for that.

However, in 2022, legal will face some new or even greater challenges. Working from home has inevitably strained the relationships that bind people together in law firms. Lawyers have re-examined their work-life balance and, in some cases, decided they don’t want to return to the rigid model of the past. For those prepared to accept the old model, it seems the price for their talent has risen, and lawyer salary inflation is likely to be a continuing trend well into 2022.

In such an environment, firms need to be clear about what they offer. This is important not just in terms of salary and other benefits but also in the area of culture and purpose, learning and development, career progression, flexible working, work-life balance and client contact. These propositions need to be clearly articulated and consistently delivered if firms are going to attract and retain the talent they need to service client demand.

Working from home has inevitably strained the relationships that bind people together in law firms. Lawyers have re-examined their work-life balance and, in some cases, decided they don’t want to return to the rigid model of the past

Across 2021, we saw an extremely hot M&A market, with over $5tn of deals announced globally. Although quantitative easing may taper off and interest rates rise marginally into 2022, the market for transactions is still expected to be benign.

A wave of Covid-19 related litigation is also likely to emerge as issues between landlords and tenants, relating to supply chains, or commodity and energy suppliers, emerge.

Furthermore, post-COP26, many businesses are going to be reviewing the opportunities to reposition their model in a carbon-neutral world. New technologies such as industrial batteries, green hydrogen, and carbon capture and storage, will see billions of dollars of investment as investors seek the winning technologies of tomorrow.

Indeed, the whole range of ESG initiatives will gain even more prominence. Many of these areas are traditional bread-and-butter issues for law firms – but they will need to reposition their offerings into a coherent product and, if necessary, work with other specialists to provide a comprehensive offering.

Additionally, governments around the world – having become used to interfering with all aspects of our daily lives – will be reluctant to let go. Regulation, in its various forms, will be even more significant to legal businesses’ clients.

Nonetheless, for firms that can respond to and embrace these market changes, 2022 has the potential to be another stellar year.