Pandemic Changing the Landscape for Lawyers

Máté Bende

The lawyers were asked to fill out an anonymous online survey conducted by Pro/Lawyer Consulting, a Hungarian firm specialized in marketing for lawyers and the legal sector. The survey was based on self-declaration, and examined changes in workload, income, and the fields of law with most and least work.  

Of the respondents, 55% work in Budapest, 28% in a large countryside city, and 17% in a small city or town. In total, 73% of the respondents operate as sole practitioners, 18% in a small office, and the rest work in a medium, large or international law firm. Although the survey was not representative, this rate corresponds with the national breakdown of the 12,000 lawyers practicing in Hungary, Pro/Lawyer Consulting says.

Only 20% reported that their income has not decreased in the last months. Digging deeper, 20% said they experienced a drop of 10-30% in revenue, 30% saw a 30-60% decrease, and 22% experienced more than 60% decrease in earnings.

Of trainee lawyers (those who have passed their law degree but have to work three years under an attorney to be eligible for the Bar exam), 67% stated that their salary has not changed in the last months. While 14% said their salary had decreased, many others are currently on unpaid leave, or work reduced hours.

Real Estate on Hold

The greatest decrease of work was in real estate, one in four lawyers remarked. Litigation and corporate matters follow in second with 15-20% noting that they experienced a reduction. A relatively lowly 5% of respondents said the decrease was significant with damages-related, criminal, and family law cases.

“The rate of M&A and finance matters were reduced by 5% as well, but the analysis revealed that these fields employed 38% of the workers of large firms, which is understandable, as these transactions are concentrated in large firms,” says Máté Bende, owner of Pro/Lawyer Consulting.

The largest growth was in the field of labor law, according to 32% of respondents, with claim management taking second place.

The survey also asked trainee lawyers how their workload has changed in the last few months. Half stated that they have less work, 6% have almost no work and 9% have lost their jobs. On the other hand, 16% of respondents stated that they have more work than a few months ago.

Only 1% of respondents answered that just 0-10% of lawyers were affected negatively by the pandemic. A little under half (45%) believe that everyone or almost everyone has been affected, and a third say just half of attorneys have been affected.

While the fact that 90% of lawyers answered that there had no lay-offs in the last few months might seem like good news, the majority of the lawyers who filled out the survey work as sole practitioners. In those firms where there were lay-offs, it mostly affected administrative staff, although in about 4% of cases lawyers had been let go as well.

Hopeful

A fifth of the lawyers are hopeful and think that every practice will survive the crisis. Some 42% of respondents thinks that 10% of law firms will fold, 23% believe that 20% of firms will go under; and 12% forecasts a 30% hit rate.

Trainee lawyers are not so optimistic, one-quarter think that many of them will lose their jobs in the next few months. Another quarter believe their salary will be reduced, 10% believe that will be for the long term.

“In the last few years, there was a lawyer shortage in the market, firms were competing for the trainees offering great salaries,” explains Bende.

“It is worth checking out the job portals; a few months ago 20-30 law firms were looking for trainees, nowadays you cannot see more than four or five advertisements. There will be a lot of trainees in the market again, this is going to push down their salary, and it is going to be the firms who will select among the trainees. Some people will have to give up on a career as a lawyer.”

More than 75% of the lawyers surveyed believe that there is a need for some kind of governmental help (rising to four-fifths among sole practitioners), but plenty also expect more from their bar association, stronger enforcement of claims, and membership fee discount. If the lawyers are not working, they still have hundreds of thousands of expenses: rental fees, bar association fees, liability insurance and also maintaining the infrastructure of their practices.

17% of the trainees believe that from now on, it will be a basic requirement to work in home-office, but there has been more criticism dedicated to the court system; mainly because of the deadlines, the difficulty of administration and quite wide criticism of virtual trials via video link.

Award-winning Law Firms

Dentons has received the National Law Firm of the Year Award for Hungary for the fifth consecutive year at the IFLR European Awards. Organized annually by International Financial Law Review, the awards honor Europe’s most innovative firms and deals.

“This award recognizes Dentons’ significant achievements in Hungary and elsewhere in the CEE/SEE region, and the work that the Budapest team has done on major projects and transactions over the past 12 months,” the law firm said.

Meanwhile, DLA Piper has been named Hungary Law Firm of the Year at the Chambers Europe Awards 2020, which was held digitally on Twitter. It is the third time DLA Piper Hungary has won the award in the last four years.

“This award is one of the most prestigious in the legal industry and we are proud to win it again. We owe our deepest gratitude to our clients, colleagues and peers who have made it possible for us to once again win this prestigious prize. We trust that our integrated services, commitment, and hard work have created real value for all of them,” said András Posztl, country managing partner of DLA Piper Hungary.