STEP is gathering market intelligence on the impact of the recession from members and their practices and businesses at two levels; through quarterly business confidence polling of 25 per cent of members every three months, and through working with 15 senior volunteers who are providing personal feedback on developments in their jurisdictions every four to six weeks. The objective is to build a picture of different markets and different areas of practice going forward.
The first business confidence poll suggests a great deal of stability in trusts and estates work compared to most other areas of law, finance and professional services. Headline results, based on a response rate of 8.6 per cent (which is statistically significant and therefore over 95 per cent reliable for a sample and survey of this size) suggest that:
• Over the next three months STEP members expect business to stay the same (61 per cent) or improve (11 per cent), whereas around a quarter of the membership expects a decline.
• Looking ahead a year, 47 per cent of members expect business levels to stay about the same, 25 per cent expect improvement and 27 per cent expect business to decline.
• Interestingly, members are slightly more pessimistic about their own practices over the next three months, where a third expect business to decrease, but are more optimistic about business in their practice over the coming year, where nearly 80 per cent of members expect business to stay the same or increase over a 12-month period.
• 42 per cent of members have seen a general decline in business through the recession and 30 per cent expect reorganisations, downsizings or restructurings.
• The largest group of members, circa 33 per cent, do not expect business to pick up and growth to restart until the second half of 2010, with 27 per cent slightly more optimistically expecting this change in the first half of 2010.16 per cent of members do not expect improvement until 2011 or after.
• Although myth has it that trusts and estates is generally doing better than other areas of professional services, the survey only bears this out to some extent, with 43 per cent of members stating that the trusts and estates area is doing better or significantly better than other areas of the business. 9 per cent said it was doing significantly worse.
• Positively, 50 per cent of members do not expect layoffs and a further 25 per cent, although they expect them, do not expect them in private client business.
• Recruitment seems to have hit a brick wall with two thirds of members expecting that recruitment is highly unlikely or frozen and a further 18 per cent stating that recruitment will only happen to fill vacancies.
• Many members are following the current regulatory debate around the world, around a quarter think it will have a serious impact on trusts and estates related work, while 50 per cent think it is too early to say.
Looking at comments from STEP listening post volunteers around the world, which we will publish on the STEP recession website in summary once they are complete, the reports show a great deal of variation, for instance, in a few jurisdictions, such as Luxembourg, business is picking up, but while times are difficult for many, no jurisdictions yet seem to have been very badly hit. However, commentators report that trusts and estates is sometimes a lagging indicator and if the recession continues significantly into 2010, business could be badly hit in a number of places.
David Harvey
Chief Executive
STEP Worldwide
The first business confidence poll suggests a great deal of stability in trusts and estates work compared to most other areas of law, finance and professional services. Headline results, based on a response rate of 8.6 per cent (which is statistically significant and therefore over 95 per cent reliable for a sample and survey of this size) suggest that:
• Over the next three months STEP members expect business to stay the same (61 per cent) or improve (11 per cent), whereas around a quarter of the membership expects a decline.
• Looking ahead a year, 47 per cent of members expect business levels to stay about the same, 25 per cent expect improvement and 27 per cent expect business to decline.
• Interestingly, members are slightly more pessimistic about their own practices over the next three months, where a third expect business to decrease, but are more optimistic about business in their practice over the coming year, where nearly 80 per cent of members expect business to stay the same or increase over a 12-month period.
• 42 per cent of members have seen a general decline in business through the recession and 30 per cent expect reorganisations, downsizings or restructurings.
• The largest group of members, circa 33 per cent, do not expect business to pick up and growth to restart until the second half of 2010, with 27 per cent slightly more optimistically expecting this change in the first half of 2010.16 per cent of members do not expect improvement until 2011 or after.
• Although myth has it that trusts and estates is generally doing better than other areas of professional services, the survey only bears this out to some extent, with 43 per cent of members stating that the trusts and estates area is doing better or significantly better than other areas of the business. 9 per cent said it was doing significantly worse.
• Positively, 50 per cent of members do not expect layoffs and a further 25 per cent, although they expect them, do not expect them in private client business.
• Recruitment seems to have hit a brick wall with two thirds of members expecting that recruitment is highly unlikely or frozen and a further 18 per cent stating that recruitment will only happen to fill vacancies.
• Many members are following the current regulatory debate around the world, around a quarter think it will have a serious impact on trusts and estates related work, while 50 per cent think it is too early to say.
Looking at comments from STEP listening post volunteers around the world, which we will publish on the STEP recession website in summary once they are complete, the reports show a great deal of variation, for instance, in a few jurisdictions, such as Luxembourg, business is picking up, but while times are difficult for many, no jurisdictions yet seem to have been very badly hit. However, commentators report that trusts and estates is sometimes a lagging indicator and if the recession continues significantly into 2010, business could be badly hit in a number of places.
David Harvey
Chief Executive
STEP Worldwide
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