Getting professional services back to business

As banker to a significant proportion of the top 100 UK law firms and the top 20 UK accountancy firms, Barclays’ professional services team has supported the professional services sector for more than 20 years. Andrea Delay, UK Head of Business and Professional Services shares how the bank is helping clients through the coronavirus pandemic – and how the crisis could impact the future of the sector.

Professional services insights

Andrea Delay, UK Head of Business and Professional Services at Barclays Corporate, is quick to point out that professional services industries vary widely – and that legal, architecture, and accountancy firms may all be impacted by the coronavirus crisis in different ways.

“There are different pressures in the sector,” she says. “There are some areas that haven't been impacted, and others that are seeing real cash flow problems.”

However, the impact of lockdown can vary even within the same industry. “If you're an employment law specialist, then you're quite busy at the moment because there's been work around furloughing staff and redundancies. Conversely, if you are a property conveyancing lawyer, business had stalled because it’s been difficult for purchasers to view properties although this is now changing as the restrictions are starting to lift.”

The key challenge facing professional service businesses is managing costs, including through reducing working hours, pay freezes and renegotiating with suppliers and landlords. We’ve also seen a number of firms weighing up activity levels in different practice areas and in some cases furloughing fee earners, trainees and support staff where necessary. Fewer of the larger firms seem to be taking the furlough option. Where firms have cut pay, partners and those on higher salaries generally seem to be bearing the greatest impact.

And while some clients have not been immediately affected, the longer-term option for firms is to review partner capital levels to ensure they remain appropriate. “What we are hearing in particular is that partner distributions are often being deferred and monthly drawings being cut to reflect the effect of the pandemic on profits.”

To help see these professional services through the current crisis – as well as backing their recovery – the bank has a broad range of options for clients, through government-backed schemes like the CBILS and CLBILS loans, as well as via capital repayment holidays and increased overdraft support.

But communicating with firms is just as crucial:

We are contacting our customers and sharing experiences within the sector. It's not just about the financial support – we’re also offering broader sector knowledge while everyone’s in lockdown.

Future proofing your firm

Delay recommends the firms in the professional services sector take time to work out which form of support will be best for them. 

It’s hard to predict what is in store for the professional services sector in the long term, but companies may see a shift from the traditional “paper-based, office-based” approach: “Looking forward, I think we will be looking at more dynamic working and using electronic platforms like DocuSign. The legal sector in particular is benefiting from an increasing number of initiatives such as Tech Nation’s Lawtech Delivery Panel that have the potential to increase the pace of change.”

With this in mind, Barclays innovation in fraud prevention is vital, both now and in the future.

The bank is ready to support clients through potential changes to the professional service workplaces: “Developing new technology and implementing new ways of working will have a cost. Barclays is well placed to support its professional services clients seeking funding for their innovation plans, with a range of financing solutions, like the Partner Capital Subscription Loan.”

Whether it’s through phone calls, sharing useful resources, or preparing for the sector’s future, supporting clients remains Barclays’ top priority: “We're making sure that clients are aware of all the options available to them.”

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