Despite the expected challenges ahead, 55% of firms report that their revenue has increased this year. This figure rises to over 90% for the biggest 20 firms, and 67% for Dublin-based firms.
The figure for regional firms is lower, however, at 44%, and 40% of firms outside Dublin report a drop in profitability over the past 12 months.
Evelyn Partners says that the legal sector is experiencing recruitment and resourcing difficulties, with more than 90% of the top 20 firms surveyed viewing recruitment and staff retention as a key concern.
The report points to an increasing trend towards 'silent quitting' – where employees work the hours set down in their contract, and no more.
"Efforts to maintain a culture of staff working extra hours as part of their normal career progression are increasingly being resisted, more typically by younger staff," the report says.
Influx adds to challenges
It also notes that an influx of UK and international law firms has had a significant impact on the legal market.
Most of the larger, and Dublin-based firms report that the new law firms have increased competition in the market and added to the challenges of recruiting and retaining staff.
The majority of the top 20 firms continue to use lateral hires as part of their growth strategies, with just over 70% confirming that they have made more than five lateral hires in the past 12 months.
From the survey responses, Evelyn Partners estimates that more than 150 lateral hires were made by the top 20 firms in the last 12 months.
The report adds, however, that many recently qualified solicitors are moving to London, where salaries are now six-figure sums .
Almost 60% of the larger firms, and almost 40% of Dublin firms, report pay increases of more than 10% for recently qualified solicitors in the last 12 months.
During the past year, more than one in three firms surveyed have been approached or have made an approach with a view to a merger. Most of these approaches were made by a UK or international law firm.
Evelyn Partners notes that seven of the top 20 firms in Ireland are now international or UK firms.
The survey signals that what the report calls a "traditionally conservative" approach to investment in technology is changing, with 73% of firms saying that they intend to increase their spend on cyber-security in the next 12 months.
Almost two-thirds of the top 20 law firms reported attempted cyber-attacks during the past 12 months.
Firms have acted to counteract this, however, with 90% of firms, and all of the bigger firms, reporting that they have created and implemented data-security policies.
Paul Wyse (Head of Professional Practices, Evelyn Partners Ireland) said that the past 12 months had thrown up more than its fair share of complexities.
"The war in Europe, a surge in inflation, increasing interest rates, and an energy crisis have all contributed to the turmoil being experienced.
“Despite all of these challenges, most top-20 firms continued their growth trajectory, but are reporting a more competitive marketplace, with more international firms now established in Ireland, with aspirations to grow their presence here even further,” said Wyse.
Evelyn Partners was created after the merger of Tilney and Smith & Williamson.
Its 11th Annual Law Survey, compiled by Red C Research, includes the views of managing partners and senior partners from law firms across Ireland.