“There has been a considerable shift in the way legal practices operate with diversification, commoditisation and specialisation seen as the key means to develop firms faced with the continued downturn in corporate work.
“The traditional income streams from banks and other corporate sources remain slow and this means that most firms affected need to ensure they have appropriate strategies in place to remain active in this new market.”
Mr Barnett also said there was growing evidence that the Scottish legal services marketplace is overcrowded.
He said: “There will be a degree of shrinkage in the coming years to match the diminished demand. It is vital therefore that firms look at potential mergers and acquisitions, whilst they are in a financial position to do so, which enhance and expand their market to encourage growth in the future.
“The firms which are already emerging from the recession are those with the most diverse portfolio of services, that are effectively managed and who have a clear strategic vision of how to develop their business in such difficult times.”
He added: “Considering growth at such a time may seem problematic, but it is the firms which can grasp the thistle and recognise that in adversity there is opportunity.
“Diversifying portfolios, commoditising services, maintaining quality staffing, enhancing management, and managing cash flow will be the key factors in ensuring that the best Scottish firms not only survive this period, but also come out the other side, stronger, fitter and more able to tackle a legal marketplace which has never been tougher.
“It is undoubtedly a difficult time, but for the ambitious it is also a period of great opportunity.”
(With thanks to Scottish Legal News for that article, first published in their )