External Business Environment of Fenwick & Co. LLP
The economy of the UK was greatly affected by the 2007-2008 financial crises. Ever since mid 2009, the country has been recovering from the crisis (Price Waterhouse Coopers 2016). Its recovery, although slower by historical standards, has been faster than that recorded by most of the other G7 economies over the same duration. While the country’s GDP growth dipped slightly in 2015, consumer spending remained relatively strong, the situation further boosted by lower oil prices. Analysts estimate that the country will achieve a GDP growth of 2% in 2016 as noted by Price Waterhouse Coopers (2016). It is also expected that consumer spending will remain strong during the year much as food and energy prices will remain low. Economists estimate that the inflation rate will gradually rise to the 2% mark from the current zero% later in 2017, which could prompt the Monetary Policy Commission (MPC) to raise the interest rates (Price Waterhouse Coopers 2016). For almost seven years, the interest rate has been maintained at almost zero percent.
According to Spence (2016), the UK has a public debt in excess of £1.5 trillion. While this is the case, the government is steadily on track in repaying this debt. Analysts note that in 2015, the UK emerged as one of the fastest growing major developed economies. The rate of unemployment steadily fell during the year steadying at 5.4% while the housing market thrived (Elliott 2015). Consumer spending during the year also grew, a trend that will most likely continue in 2016 going by experts predictions. The country has also benefited from the strengthening of the pound against major currencies including the Euro and the US dollar in 2015 according to Elliott (2015). Although the first half of 2016 seems promising for the nation in economic terms, the second half is quite uncertain as noted by Elliott (2015). The uncertainty in this respect revolves around the impending referendum on Brexit.
The UK has a population of more than 65.6 million people according to the Office for National Statistics (2018). Of this population, those ages 0-14, 15-24,25-54, 55-64 and 65 years and over account for 17.3%, 12.6%, 41%, 11.5% and 17.5% respectively (Index Mundi 2015). The population growth rate stands at close to 0.54%, the population comprising different ethnic groups, majority of which is White (87.2%). Close to 80% of the population of the UK lives in urban areas with London hosting over nine million residents (Index Mundi 2015). The nation has a literacy level of 99% according to Index Mundi (2015). The aging population in the country is steadily growing which also means that spending on the aging population by government and individuals is steadily rising (Kingsfund 2016).
London has a population of more than 8.8 million individuals according to Prynn (2017). Majority of people living in London are in the 16-34 age bracket (Trust for London 2016). The city has a growing population of persons aged 65 and over. Reflective of national statistics, the city has a literacy level of 99%. The population of the city is mixed with ethnic groups including Whites, Blacks, and Asians (Trust for London 2016). Being a global business hub, London has a high population of foreigners from both EU and non-EU countries. The level of migration to and from London remains high at different times of the year. The prominent presence of foreigners in the city has seen residents of London embrace different lifestyles and cultures as influenced by visitors.
In general, people in the UK have divided opinions regarding whether the country should withdraw from the European Union. They are also divided on the net effects of a UK withdrawal from the EU in the immediate, medium and long terms. A recent opinion poll indicated that 46% of UK nationals want the UK to remain in the EU against 43% opposed to this view (Financial Times 2016). The population enjoys a lot of freedom in choosing what individuals do and where they work. Most individuals however work in urban areas where job opportunities abound.
One of the technologies that affect how business is conducted anywhere in the world is Information Communication Technology. Statistics indicate that over 90% of adults in the UK use computing devices on a daily basis (Office of National Statistics 2015). Statistics further indicate that close to 38 million adults, accounting for 77% of the country’s adult population, have access to the Internet on a daily basis (Office of National Statistics 2015). Between 2010 and 2014, usage of mobile phones to access the Internet grew from 25% to 58% (Office of National Statistics 2015). Well over 91% of UK households currently have access to broadband Internet.
Statistics show that over the years, use of ICT to procure or offer services has steadily grown among UK nationals (Office of National Statistics 2015). Some of the activities that people across the nation perform using the Internet include Internet banking, reading news, finding information regarding products, sending and receiving emails, buying or selling products, playing games, downloading software and social networking (Office of National Statistics 2015). The advent of social media has transformed the way businesses market themselves and interact with current and potential customers. Many businesses in London today have an online presence both in the form of a website or on social media. Businesses rely on social media to reach and respond to clients in real time. In general the Internet and social media have helped reduce the costs businesses have to occur in marketing their products, banking and in communicating with different persons. It has also made communication more efficient and effective. According to the Office of National Statistics (2015), close to 95% of households have televisions and roughly 93% of adults own a mobile phone in the nation.
Law firms in the UK and indeed other countries are fast adopting modern ways of doing business. Some of the law firms in London are going paperless as a way of reducing costs (Law technology Today 2015). The law firms are also using practice management software to schedule their activities and manage their resources for greater efficiency. As a way of reducing the risk of losing important information, many businesses are opting to store their data on the Cloud (Law Technology Today 2015). By backing up data on the Cloud, businesses are assured of having their information back in the event that the printed or soft copies they have locally are intentionally or accidentally destroyed or lost.
The United Kingdom has a stable and reliable legal system. The country also has a reliable court system. Legislations and policies are instituted by the national and local governments through elected leaders. Several laws apply to businesses in the UK and London specifically. Some of these legislations relate to employment laws, contract laws, and environmental laws.
The national and local governments of the UK are concerned about the maintenance of a clean and safe physical environment. The Environmental Protection Act 1990 demands that domestic, commercial and industrial wastes be properly disposed to ensure that the environment remains clean (Tromans 1991). The law also aims at preventing harmful or unauthorised activities. The law places the duty of care on specific persons with a view of ensuring that wastes are properly managed without contravening on other people’s rights (Defra 1996). The London County Council has also instituted laws to ensure that the physical environment is conducive and that all kinds of pollution are minimised. Appreciating the fact that climate change is a serious global issue, the different levels of government of the UK are taking measures to ensure that nationals minimise emission of greenhouse gases.
Some of the policies and regulations that have been enacted recently and that will affect the operations of Fenwick & Co. LLP include the Pre-Action Protocol for Personal Injury Claims (2013), the Children and Families Act 2014 (CFA 2014), and the Finance Bill 2016 (Ministry of Justice 2013; UK Parliament (2016).
Being a major city, London has a huge population of people. The city has a good transport network comprising road, rail and air transport systems (London County Government 2016). In spite of the huge population of people in the city, the city’s environment is generally clean and well planned. More than 50% of the area in the city is covered in plants making the air quality much better that it is in most cities around the world (London County Government 2016). With parks and green spaces covering a huge part of the city, people in the city have several options to choose from when it comes to resting and leisure. The city has a reliable supply of clean water and well maintained sewer and drainage systems. In general, the city has a good infrastructural network that is vital for the success of businesses.
Fenwick & Co. LLP is operating in a business environment that is both politically, economically, and socially stable in spite of the changes that could result from the UK’s withdrawal from the European Union. The huge population of London, its position as a business hub, its good environment and infrastructure together make it a strategic location for doing business. With the UK experiencing steady recovery from the effects of the global financial crisis, low interest rates, low inflation, increasing consumer spending power, and a growing population of elderly individuals, there are high chances that in the foreseeable future, small law firms like Fenwick & Co. LLP are bound to experience good economic times. Although the effects of the UK’s withdrawal from the EU are yet to be fully appreciated, there are high chances that small law firms in London will gain significantly from a withdrawal. This is the case given that many law firms owned by foreigners may exit the market as a direct result of the withdrawal leaving fewer players in the market.
The company needs to take a number of measures to position itself as an emerging leader in the market. One of the measures that the company should take is strengthen its online and social media presence as a way of attracting more customers and creating awareness of its brand. The company should also purchase and make use of practice management software as a way of increasing its efficiency. Although storing information on the Cloud comes at a cost, the business needs to go this direction as a way of insuring itself against the effects of losing vital information. The company should also take every measure to align its activities with legislations such as the employment laws. Recent changes in laws relating to crime, family, and Personal Injury Claims call for an update of the employees’ knowledge of the laws and their effects on the business and its clients. Fenwick & Co. LLP which intends to establish other branches in the near future may not be able to do so in other EU countries easily in the event that the UK withdraws from the EU. The company should consider seeking alternative sites as soon as the results of the referendum indicate that the UK will withdraw from the EU.
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BBC (2016) Guide to May 2016 elections in Scotland, Wales, England and Northern Ireland, viewed from http://www.bbc.com/news/uk-
Carney M. (March 2015) Remit For the Monetary Policy Committee. HM Treasury, London.
Defra (1996). Waste Management, the Duty of Care, A Code of Practice The Stationery Office, London.
Elliott L. (December, 2015) The UK economy in 2016: a flying start but watch the brakes, viewed from http://www.theguardian.com/
Financial Times (2016) UK’s EU referendum: Brexit poll tracker, Financial Times, London.
Grandhi K. (December 15, 2015) Rise in UK minimum wage will cost businesses more than £1bn, viewed from http://www.ibtimes.co.uk/rise-
Index Mundi (2015) United Kingdom Demographics Profile 2014, viewed from http://www.indexmundi.com/
Kingsfund (2016) Ageing population, viewed from http://www.kingsfund.org.uk/
Law Technology Today (2015) How Lawyers Will Modernize Their Firms in 2015, viewed from http://www.lawtechnologytoday.
London County Government (2016) Green Capital – Green Infrastructure for a future city, London County Government, London.
Ministry of Justice (2013) Pre-Action Protocol for Personal Injury Claims, Ministry of Justice, London.
Office of National Statistics (2015) Internet Access – Households and Individuals: 2014, Office of National Statistics, London.
Price Waterhouse Coopers (2016) UK Economic Outlook – March 2016, Price Waterhouse Coopers, London.
Spence P. (2016) How large is the UK’s national debt, and why does it matter?, viewed from http://www.telegraph.co.uk/
The Law Society (2015) The EU and the Legal Sector, The Law Society of England and Wales, London.
Tromans, S. (1991). Environmental Protection Act, 1990: Text and Commentary. London: Sweet & Maxwell.
Trust for London (2016) London’s population by age, viewed from http://www.
UK Government (2016) Corporation Tax rates and reliefs, viewed from https://www.gov.uk/
UK Parliament (2016) Family law, viewed from http://www.parliament.uk/