According to a recent article by Gregg Wirth in Thompson Reuters Legal Executive Institute, the notion of the fancy traditional downtown office of law firms is fundamentally changing. And with it ultimately, in my view, the nature of the profession. Three immediate factors are driving this change: partners are embracing remote work, the trickle-down effect on the use of technology, and a new emphasis on cutting costs. All three of these factors will change how lawyers view tech and working from a central.
First, some facts. Wirth cites research by Sherry Cushman of the real estate firm Cushman & Wakefield that shows the legal sector will be downsizing its real estate needs on average 10% to 30%. And in some cases, up to 40% to 50%. That’s a pretty significant decrease. These statistics are consistent with a poll by Cushman of some 700 law firms in October 2020, which revealed 93% of responding firms were going to make changes in their workplace, with 24% describing those changes as “drastic.”
And it goes without saying that many law firm staff members want to continue remote working: Cushman estimates that some 70 to 80% of the staff like working from home. It saves them money and commute time. But more surprisingly and importantly, Cushman thinks partners want to continue to work more remotely as well, even more than associates. This desire has important implications since firm partners dictate firm policy concerning remote working and law firm real estate. If partners want remote work and less office space, it will happen. Allen & Overy’s recent announcement that expects 40% of its workforce will work remotely is evidence of this very fact.
And if partners are working remotely, then the staff that supports them will not necessarily need to be in the office as the move to remote has already shown. This, in turn, reduces the need for office space even more.
It can’t be seriously doubted that fewer partners and people in a central office will change how people in law firms view and relate to one another.
And while I believe the notion of firm culture is overblown, it can’t be seriously doubted that fewer partners and people in a central office will change how people in law firms view and relate to one another.
But here’s an even more significant impact. Let’s call it the trickle-down effect. It’s no secret that Lawyers, often those more senior, but maybe even others, have not necessarily embraced technology. Mainly because neither clients nor law firms have demanded it. And add in a business model (the billable hour) that doesn’t necessarily reward the efficiencies that technology can bring, and you have ample reasons why lawyers don’t pay much attention to tech.
But with remote work, that could change. Lawyers have become more technologically proficient because working from home requires it. And that proficiency and a mindset toward tech will spread to other areas as lawyers get more comfortable with tech and what they can do. The more you use and become familiar with technology, the more you are open to it. Lawyers will start liking the ability to get their work done faster and better. After resisting change for what seems like forever, lawyers are discovering how to use technology. They are learning how to do things themselves. They are finding how to save nonbillable commute time. Let’s also not discount that software is a factor in work satisfaction.
Lawyers are getting more efficient somewhat by accident.
Lawyers are getting more efficient somewhat by accident.
But there is yet another important the remote work revolution is bringing. After years of not actively resisting less space and palatial digs, stop and ask yourself why lawyers and law firms are now open to less of each. Simple: cost savings. (Real estate cost is the second highest law firm cost, right behind personnel.) With increased pressure by clients on rates and an uncertain future regarding the amount and type of available work, law firms are looking to sustain profits by cutting costs. (Just this week, Mayer Brown announced increased profits well above its relatively meager revenue increase). Also, keep in mind that now and in the future, one big source of billable hours—travel—will be significantly reduced by client demand. So finding a new way to keep profits up by reducing cost will become even more critical. Firms would be well advised to use some of these savings to enhance technology rather than shifting it all to partners’ pockets.
And let’s not forget that technological efficiencies can often reduce personnel needs as well, particularly for staff whose work can’t be billed for. (Yes, this sadly hurts those who can least afford it).
A sea change driven not by the need to be more efficient or provide better customer service but by a desire to make money. Who would have thought?
Bottom line: after all these years of resisting technology and innovation, there may be a gradual sea change. A sea change driven not by the need to be more efficient or provide better customer service but by a desire to make money. Who would have thought?
How will this affect the vaunted firm culture? Who knows the long-term changes in how law is practiced and how law firms function? But whatever the differences are, I’m betting they will be substantial.