Confidence in market still an issue

Apr 14 2009 by Neil Warwick, The Journal

THERE have been recent reports of “green shoots” of recovery appearing in the economy. There was a comment in the Press last week stating that some professionals felt the property market had hit the bottom and was starting to turn.

The issue remains however, one of confidence. When confidence leaves the marketplace, whether it be global or local, it takes time for it to return.

It is important to remember that when looking for a return in confidence, it is sometimes sensible to look locally.

It is possible to look at the North East market and see evidence of how it differs from other UK regions. There may, therefore, be different opportunities available and possibly even sooner than in other parts of the UK economy. Looking at your own industry sector within your own geographic contacts is vital. Now is the time to look at what the world would be like when, not if, we come out of the recession.

The professional service sector has been hit harder than in previous recessions and has been shocked by the speed and impact of this. The landscape for professional services had changed and in some ways, coming out of the recession will either be more of the same or will lead to huge changes. In the legal sector, there is the risk of the Legal Services Act which was introduced when the markets were high and it was felt there should be opportunities to invest in law firms.

New forms of regulation have been proposed and there is now the opportunity for other professionals to join with law firms. However, the market is a very different place.

One question posed within the legal profession is whether or not the Legal Services Act will lead to the so called “Tesco” law approach? Will the entire profession be commoditised? Will people end up buying legal services at their supermarket?

The answer is that it is highly unlikely that huge areas of law will be commoditised. Certain services will lend themselves to a bulk delivery approach. However consistent client feedback is that when dealing with things that are really important like family matters, the sale of a family business and tax planning, ultimately people still wish to deal with other people face to face.

Neil Warwick, partner at Dickinson Dees