Developing Personas and Mapping Digital Customer Journeys

Commercial law services

Operators in this segment provide legal advice to businesses, mostly relating to major corporate transactions such as mergers and acquisitions, IPOs, financing methods and taxation solutions.

The business cycle, investment trends and overall corporate activity heavily affect demand for these services. Due to commercial transactions' complexity, legal firms that specialise in this segment often command high premiums, representing a large portion of industry revenue. The top-tier law firms are the primary services providers in this segment. Some commercial law services, such as those associated with bankruptcy and restructuring initiatives, are counter-cyclical.

The COVID-19 pandemic has had a mixed influence on commercial law services. Demand for ongoing and core services has remained resilient amid the broader economic decline. The government provided support initiatives, such as JobKeeper, to downstream businesses during the COVID-19 pandemic. This support has limited demand for counter-cyclical services, such as bankruptcy, as it has kept these businesses afloat. Insolvency claims were below normal rates in 2019-20, during the peak of the pandemic. However, demand for bankruptcy and restructuring services are anticipated to rise sharply in the two years through 2021-22, as support packages are withdrawn and closed international borders continue to affect some sectors, resulting in ongoing economic weakness. Demand for transactional services, such as merger and acquisitions (M&A) activity and IPOs, are expected to fall sharply over the past three years. Unfavourable economic conditions and prolonged effects of the COVID-19 pandemic have discouraged M&A activity and other commercial business activities that require legal services. While improving conditions in the current year have supported increased activity, this is not expected to return to pre-pandemic levels. As a result, this segment has declined as a share of industry revenue over the five years through 2021-22.

Personal legal and industrial relations services

This service segment includes legal work related to wills and estates, personal injury, workers compensation and family law.

Sole proprietors and small firms are the primary providers of personal legal services, as services in this segment are less profitable than services in other segments. Since the government implemented the Fair Work Act 2009, employers have had to abide by regulations involving good faith bargaining, industrial action and permitted agreements. Legal firms provide services to both employers and employees. Legal services relating to industrial relations usually involve unions and large corporations.

Family law is also significant in this segment and involves matters concerning the family court, such as divorce, legal guardianship and child support. Family law predominately consists of alternative dispute resolution services rather than litigation due to the Family Law Act 1975, which requires individuals seeking parenting orders to attend compulsory family alternative dispute resolution sessions before taking the matter to court. Alternative dispute resolution services are expected to generate lower returns per case, but generally support the industry's performance as they are often mandatory.

The COVID-19 pandemic has contributed to an increase in worker compensation claims, partly due to people contracting COVID-19 through their workplaces, supporting demand for industry services. Issues relating to housing and employment are also expected to rise, further increasing demand for this segment's services. In addition, the number of divorces has risen over the past five years, increasing demand for legal services. As a result, this segment has increased as a share of industry revenue over the period.

Property law services

Property law services refer to property conveyancing and other property-related legal work.

Small local law firms primarily provide these services to households and businesses engaging in property transactions. As a result, interest rates and the domestic economy's strength significantly affect demand for property law services. Additionally, while property owners and investors account for a large portion of this segment's clients, property law specialists also advise property developers on issues such as structuring finance for property sales. Operators in this segment face strong and growing competition from real estate agents and mortgage brokers that can provide these services. The property market has struggled due to volatile business conditions and foreign investment, contributing to a decline in demand for this segment's services. However, improving conditions in the current year have limited this decline.

Community legal services

This segment includes legal aid authorities and community legal centres.

Eight legal aid authorities operate in Australia, with one in each state and territory. Legal aid provides funds that allow access to legal representation, while community legal centres often provide free legal advice and services. Almost 200 community legal centres operate throughout Australia, providing free legal services to the public with a focus on helping disadvantaged individuals. State and federal governments provide most of the funding for these services. These firms also derive a small proportion of funding from other sources, such as philanthropic organisations. Tenancy, employment and family law advisory services are anticipated to rise in response to the COVID-19 pandemic, and related law changes and moratoriums. In response, the Federal Government has increased funding to support those that the COVID-19 outbreak and the 2019-20 bushfires affected, boosting growth in this segment. As a result, this segment has increased as a share of industry revenue over the past five years.

Intellectual property law services

Intellectual property refers to legal protection, such as patents, copyrights and trademarks, of valuable intangibles including ideas, inventions, words, trade secrets, discoveries and designs.

This segment consists of a range of clients across different industries. Clients include pharmaceutical and information technology companies, fashion houses and food and beverage manufacturers. Volatile business confidence has contributed to falling private expenditure on research and development, subsequently limiting the number of intellectual property cases that require legal services. As a result, this segment has slightly declined as a share of industry revenue over the past five years.

Criminal legal services

Barristers provide a higher proportion of the criminal law services segment compared with other legal professionals, as clients that require these services often need in-court representation.

An increase in illicit drugs, weapons and explosives offences has supported demand for criminal law services over the past five years. These cases are generally more complex than other crimes, such as traffic violations, allowing lawyers to charge higher fees. Therefore, this segment has increased as a share of industry revenue over the past five years. However, demand for criminal law services has slowed over the period due to weak growth in criminal activity. The COVID-19 pandemic is expected to further limit segment revenue. During lockdown periods, minor criminal offences, such as drink driving and street violence, have been falling. Nonetheless, domestic violence cases have risen significantly, modestly supporting demand over the same period.

We are going to take a closer look at one speciated type of lawyer, solicitors. As Tomiczek and Sidonie (2021) found that