Most of Ireland’s law firms have hiked fee rates charged to clients in an effort to preserve margins in the face of rising inflation and significant increases in operating and salary costs.
he trend, revealed in a report by Evelyn Partners, comes amid increased competition from UK and international firms which has seen wages spiral in Dublin firms.
The report indicated “eye-watering salaries” available in London had also fuelled pressures for salary increases on this side of the Irish Sea.
“Almost two in three law firms have increased their fee levels to counteract the increases in their cost bases,” said the report, which was based on a survey of senior partners at 108 firms around the country.
The proportion of firms who increased their fees is significantly higher than reported in previous years.
In 2020 the percentage of firms who had increased fees was just 29pc, while it was 35pc last year.
Wage inflation was not uniform, however, with much higher salary level rises being seen in Dublin than outside the capital.
“The average increase in the regions worked out at 3.5pc, which would be consistent with last year. Whereas in Dublin it has gone from 5.5pc to nearly 11pc,” said Paul Wyse, head of professional practices at Evelyn Partners Ireland.
The data was published in the wealth management and professional services group’s Annual Law Survey report.
The survey was previously conducted by Smith & Williamson, which rebranded as Evelyn Partners following a merger with Tilney.
The report said almost half of firms surveyed are expecting a deterioration in outlook for the sector in the coming year with the majority citing the economic cycle as a key concern.
It also noted that Dublin was becoming “London by the Liffey” following an influx of UK firms post-Brexit.
Seven of the top 20 firms in terms of practicing solicitor numbers are now UK or international firms and half of the top 30 UK law firms have now opened offices in Dublin.
Almost all legal firms surveyed viewed recruitment and staff retention as a key concern.
“There is now a definite impact of the entry of so many UK and international firms into the marketplace,” said Mr Wyse.
“You can see it both in the number of partner hires these firms have made out of other firms and the number of senior staff they are attracting.
“We found there were at least 150 lateral hires made in the last 12 months by the top 20 firms. That is a lot of talent moving around the place.”
Mr Wyse said salary levels in London were having an impact on wage expectations in Dublin.
“That is beginning to play in the salary increases over here as firms try to keep people,” he said.
The survey found two-thirds of top 20 firms and just over half of Dublin-based firms had implemented a hybrid working model of three days in the office and two days working remotely for partners and qualified staff.
However, most firms have trainees in the office four to five days a week, while 79pc of regional firms are operating an in-office policy.
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