As with most things in life, one can choose to take an optimistic or pessimistic view of the circumstances.
In 2015, I had a very optimistic view of the world. All of the indicators were that corporate activity and the workload of corporate lawyers was going to increase. It has and even within the South Australian market, the level of activity has been significantly higher than in past years.
It’s likely that this, to a significant degree, has been as a result of greater stability. Low interest rates, a lower Australian dollar and a generally less volatile business environment has allowed businesses the confidence to follow through on strategic initiatives. For those that have been willing to be innovative in their approach, the rewards have been there.
Driving innovation to secure rewards has found favour in recent times with the Commonwealth Government and the recent Innovation Statement provides a number of initiatives that I believe will lead to even greater corporate activity in 2016.
2015 saw stability across key legal areas also.
On the whole, there were few materially significant changes to legislation impacting on business.
Perhaps the most significant change to the regulatory environment in 2015 was the wholesale revision to the Country’s foreign investment law and practice. This review has brought into greater focus the issue of foreign investors owning rural business interests. The recent rejections of foreign investment applications related to significant rural businesses indicate that a greater focus is being applied to protecting Australia’s abilities to feed itself.
2015 also saw a change in focus to assist smaller businesses.
From changes in tax treatment to enable easier restructuring and growth initiatives to changes to the Competition and Consumer Act to give small business the benefit of the unfair contract terms provisions, there has been a significant focus on this sector of the economy. This smaller business sector is also likely to be a significant beneficiary of some of the new initiatives announced in the Government’s Innovation Statement.
Changes to employee share scheme rules, tax breaks for early stage investors, changes to the ability for companies to raise money through equity crowd funding and changes at a State level to stamp duty provisions will all go to reduce cost and build incentives to smaller to medium enterprises that are looking to grow. While the implementation of these initiatives will take some time, I believe they’ll be of significant benefit to small and medium enterprises.
With regard to how clients access corporate legal services, the traditional large law firms are finding it increasingly difficult to meet the demands of clients for certainty. Companies are becoming much more willing to find ‘the right person for the job’ rather than regard one person or firm as their trusted legal adviser. Some of this is driven by the ability of a legal provider to make a call on commercial issues rather than simply explain the law. Clients don’t want just legal advice; they want an answer to their question, which helps them decide what to do next. Those law firms that commit to deliver agreed commercial objectives, on time and budget have a significant competitive advantage.
The focus of clients on finding the most skilled and experienced advisers for their specific concerns will drive the growth of smaller law firms focused on a specific and specialised skill set in a particular market. This will in turn lead to a greater degree of collaboration between ‘competing’ firms as clients demand that their top advisers across different skills sets at different firms work together.
In South Australia we’ve also seen an ongoing trend of local law firms looking to the East Coast to grow their businesses. This means diverting resources away from the local market, which creates opportunities for those proudly South Australian-focused businesses.
Perhaps I’m too much of an optimist, as I said before, but I believe that there’s lots of opportunity in South Australia with some fantastic entrepreneurs, businesses and people who continue to look at the positives of our State.
I think 2016 is going to be even better than 2015!