A former law partner of mine was fond of saying “a lawyer spends half of his or her life worrying about not having enough to do and the other half worrying about having too much.” If the recent Thomson Reuters-Georgetown 2022 Report on the State of the Legal Market Report is any indication the profession is certain in the too much to do half on steroids. And that phenomenon may portend some fundamental and long-awaited changes.
In a nutshell, the Report demonstrates that to thrive post-pandemic and even survive, lawyers will need to better adopt technology, use better workflows, and make sure work is done by right mix and training, and experience. Otherwise, the work that is piling up during the great talent shortage just won’t get done.
According to the Thomson Reuters press release, the State of the Legal Market Report is issued jointly each year by the Center on Ethics and the Legal Profession at Georgetown Law and the Thomson Reuters Institute. The Report relies on data collected by Thomson Reuters. The Report reviews the performance of U.S. law firms and attempts to identify what factors drive long-term change and strategy.
The pandemic has fundamentally changed and continues to change the practice of law.
At the risk of stating and quantifying the obvious: the pandemic has fundamentally changed and continues to change the practice of law. As James W. Jones, a senior fellow at the Center on Ethics and the Legal Profession at Georgetown Law and the Report’s lead author puts it: “While firms are understandingly seeking a return to ‘normal’, the reality is that…the legal industry emerging from the pandemic is not the same that entered it.
The Report identifies 4 key issues facing law firms post-pandemic that I think will drive change:
Competition For Talent-The Report notes that the current insane competition for talent, especially at the associate level, is the biggest threat to law firm profitability. Put simply, in most firms there is not enough people to do work. Skyrocketing demand in corporate, mergers and acquisitions, and real estate areas has led to the greatest associate demand for at least a decade. And as might be expected, this need and the lack of supply has led to a “dramatic” increase in compensation.
There are few things that lawyers fear more than not being able to timely complete their work
Quite frankly, there are few things that lawyers fear more than not being able to timely complete their work. Since throwing more lawyers at work is no longer the solution as it has been for years, lawyers will now need to look for other ways to get the work done. Like using technology to be more efficient. Like using professionals who don’t happen to be lawyers to do work that doesn’t require a lawyer.Like looking at process and workflow.
Retention Crisis-Associate turnover at law firms is now at record levels. And the turnover is happening when law firms need their associates the most. Somewhat unexpectedly, the rise in associate compensation has not, according to the Report, necessarily stemmed the rise in turnover, compounding the management issue.
Law firms traditionally solved problems like turnover by throwing more money at it. But it’s not working anymore. But as the Report concludes, the “loyalty lawyers feel to their firms and their willingness to work hard is not simply, or even primarily driven by compensation.”
Associates are tired of long hours and regimented work conditions it seems. They want better treatment and are voting with their feet. If one thing the pandemic has shown us, life is unpredictable and short. So when associates don’t like the conditions and environment where they are, they simply move on. It’s a perfect crisis storm for management: more work, fewer people to do it and the people who are there to do it don’t want to work as much as they used to. Again, lawyers and firms will be driven toward efficiencies and better workflow out of necessity. (Another interesting finding: those firms where people tend to stay have more productive lawyers. Duh.)
Navigating The Hybrid Work Model-Law firms are beginning to realize and perhaps begrudgingly accept that in new normal, lawyers–both partners and associates–are going to work more remotely than before. That firms just can’t demand a return to the office and have any hope of retaining the talent they so desperately need.
Remote, hybrid work requires both lawyers and law firms to adopt better technology. As lawyers get used to technology and see its benefits, their view of it will change. For the better.
Remaining Operationally Flexible-Law firms have finally learned the operational necessity to be able to adapt to rapidly changing events. Law firms have to become, perish the thought, nimble. Nimble in thinking and action.This requires a different more open way of thinking and being more innovative.
Given all this, you have to forgive law firm management for feeling like their proverbial candy cane has been thrown into a fire ant nest.
But there are tools. More tech, better work process, more remote work, becoming nimble. Bottom line, successful law firms, and lawyers can’t afford business as usual post-pandemic.