Cyber attacks on country's top 20 'magic circle' law firms surge 60pc
Cyber attacks on the country's top 20 or so called 'magic circle' law firms have surged by 60pc in less than a year, with more than six out of 10 firms reporting attacks.
The sixth annual survey of Irish law firms, by Smith & Williamson, revealed that technology, along with Brexit, were the "stand-out" issues affecting the legal sector.
Leading law firms are now deploying some 6.1pc of their turnover on IT, up from 5.6pc last year, with the country's firms most concerned about malware, phishing and "people-related security issues".
Pressure on fees and recruitment are major challenges as the economy improves and UK law firms target Dublin in the wake of Britain's decision to leave the European Union.
"In all, the legal sector in Ireland is performing well but faces significant challenges in the next two to three years as political uncertainty, technology and competition for staff take their toll on the bottom line," said Paul Wyse, managing director of Smith & Williamson.
"The outlook continues to be characterised by uncertainty."
Mr Wyse said that US President Donald Trump's stated intent to reduce US corporate tax rates and change tax policies with regards to repatriation of profits - and the recent moves away from agreements previously negotiated with other nations, were causes of concern.
"These issues have affected business confidence going forward," said Mr Wyse.
"While almost two in three firms saw that the business outlook for the legal sector had improved over the last 12 months, only 47pc of law firms and 33pc of the top 20 firms believe the business outlook for the legal sector in Ireland will improve in the next 12 months."
Brexit has led to a surge in UK-based solicitors, more than 1,000 to date, who have registered to practice in Ireland.
It is also leading to the prospect of Irish law firms being acquired by British counterparts.
A small number of UK firms, including Kermans, Simmons and Simmons, and Pinsent Masons, have set up small, greenfield operations in Ireland since last year's divisive poll.
However, almost half (44pc) of our top 20 firms have been approached by a UK law firm since Brexit with a view to a merger, acquisition or a strategic representation arrangement.
Almost nine of 10 firms expect more UK firms to open up offices in Dublin and anticipate the entry of these firms as the main source of competition over the next three years.
While most top 20 law firms have installed dedicated Brexit strategic plans, few outside the top 20, just 3pc, have plans in place.
Most firms anticipate an increase in M&A activity owing to Brexit and the introduction of LLPs (Limited Liability Partnerships).
The survey, carried out by Amarach Research, secured responses from 115 law firms including 18 of the top 20 Irish firms, 19 mid-tier firms and 78 small firms.
Some 75 of the firms were based in Dublin.
Most firms identified the economy and maintaining profitability as key issues facing the legal sector over the next year.
An intense war for talent is also vexing firms as the economy improves, with 52pc of firms reporting vacancies at the time of the survey and pay increases outstripping inflation.
Most top 20 firms reported salary increases of 3pc or more in the last year, with more than one in two (56pc) reporting salary increases in excess of 5pc.
"The results of this competition for staff are predictable and clearly evident," said Mr Wyse.
"Some 63pc of all firms reported pay increases this year, and firms are having to resort to other benefits such as flexible working hours, unpaid leave, and flexible benefits to attract and keep staff at their firm".