As the end of 2022 draws closer, now is the time to take stock of your firm’s performance against the challenges the last years have thrown at the legal market.
Thompson Reuters recently released their “State of the Legal Market Report” for 2022 highlighting four major challenges facing today’s top law firms.
Those looking to become (or remain) competitive in the rapidly changing legal landscape only have a short amount of time to adjust to these major — some even counterintuitive — trends that will shape the next year:
- Fierce competition for legal and other professional talent
- The crisis of retaining the talent firms already have
- Successfully navigating the hybrid work model
- Remaining operationally flexible in responding to further changes that may emerge in the market
Here’s a deeper look at the issues and how you put your firm on the right side of these shifts.
1. Addressing the fierce competition for legal and professional talent
The pandemic forced many professionals to take a step back and reevaluate their relationship to their work.
What emerged was a new emphasis on work-life integration, declining employee loyalty, and a market that heavily favors job seekers over employers.
Compounding the issue is the flood of new legal graduates that had their timeline postponed by the pandemic.
In response, firms are spending massive amounts of money trying to recruit the best talent on the market.
But is this the best approach?
Even as average salaries climbed over the last few years, turnover rates also reached a new high at 23.2% — putting many firms’ profits at risk for only modest returns, at a time when profits are increasingly important to attorneys hoping to build an investable firm.
What’s clear is that firm satisfaction is not equal to compensation.
2. The crisis of retaining the talent firms already have
The new talent on the market also indicates an increase in the number of attorneys and legal professionals thinking about “making the move.”
Ask yourself this: are you creating a Stay Firm or a Go Firm?
Culture, vision, and leadership are all crucial components of creating a Stay Firm.
Without them, your high turnover rates could become costly.
Reuters estimates that Go Firms bill an average of 51 fewer hours per year per lawyer than Stay Firms.
At the average hourly rate of $533, that’s over $27,000 per lawyer per year — the true cost of poor leadership.
3. Successfully navigating the hybrid work model
It’s clear that hybrid work environments are here to stay.
Firm owners need to find a way to adapt their operations and culture to provide a world-class client experience and stay competitive in today’s legal landscape.
While hybrid work poses a challenge, it also presents new opportunities to change the working model of your firm and open up to new business and new markets.
4. Remaining operationally flexible
Facilitating remote work isn’t the only operational consideration for today’s firms. Even with expense cuts, law firms increased their tech spend 7% during the pandemic. That trend points to the continuing reality of prioritizing innovation in today’s legal industry.
A few ways law firms have adapted operationally in the past year:
- Professional staff resources and support via wellness and mental health programs
- Adequate technology and administrative support for flexible work arrangements
- Policies and procedures to provide adequate oversight for remote and hybrid teams
These changes also brought the introduction of new technologies to the market and places more emphasis on how working hours are tracked and billed.
Reaching the Tipping Point
Addressing these coming challenges comes down to:
- Building a culture that attracts and retains talent
- Locking onto the technology and strategies that are propelling the best firms forward
- Creating a clear vision to guide you and your team through any uncertainty
There’s only one place in the industry where this all comes together to put your firm on the fast track to success: Crisp Coach.
Crisp Coach is a closed-door community of the highest-performing law firms, and yours could join them.
Ensure that 2023 is your best year yet with the happiest clients, most accountable team members, and most streamlined operations. Apply today!
