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How BigLaw firms can prepare for a looming recession
The government has voiced its growing concerns about the increasing probability of a global recession, with Treasurer Jim Chalmers telling the ABC that “the world is bracing for another global downturn” from which Australia will not be spared.
Jess Feyder
Managing partner, Australia, at DLA Piper, Amber Matthews, discussed the predicted effects on BigLaw firms and what the global law player is doing to prepare for it.
“A downturn may mean having different client conversations and looking to areas where clients need more support in managing risk or taking advantage of unexpected opportunities that present in a more unpredictable environment,” noted Ms Matthews.
Global firms, like DLA Piper, often have the capability to support complex cross-border investments into Australia. “The lower Australian dollar will make this even more attractive to inbound investors,” Ms Matthews posited, and “will be good for certain sectors, such as mineral resources and other export-oriented sectors”.
“Australia is regarded as stable and somewhat of a safe haven for investment at the moment,” she posited. “Superannuation funds and private equity continue to drive investment and favour predictable markets.
“On the whole, both during and after COVID, large law firms have enjoyed strong demand for their services, adapted well to the needs of a changing workforce and have had good financial results.
“This has built resilience and confidence in law firms and prepares them well for recession and uncertainty.”
To prepare for the recession, DLA Piper is monitoring the changing global economic environment and working closely with clients to better understand how they might be affected.
“As a full-service, global law firm, we are very well hedged geographically but also in terms of industries, sectors and practice areas,” stated Ms Matthews. “Our dual strengths in transactions and litigation balance client demand quite well and mean we can pivot to respond to difficult economic conditions.”
For global firms covering many markets, conditions are always varied, “this means providing a tailored offering through sector focus or practice areas”.
“We remain cautiously optimistic that the impact of a global recession will be less acute in Australia,” she argued.
Ms Matthews noted that the firm has seen continuous demand for ESG solutions and climate change litigation and consultancy services.
“The push for energy transition and concerns about energy security will continue, and we expect to see continued investment and regulation in the energy sector.
“There is always a demand for quality legal services,” she noted; providing quality advice and understanding client needs are important — whatever the economic environment.
“As the experience during COVID showed us, clients turn to their trusted advisers during times of uncertainty and distress, and this is when law firms can really step up to help.”
