Law Firms Leaders Optimistic About Growth, Unsure About Making Radical Changes
Law firms face numerous challenges, including those coming from clients, from within their own firms, and from the economy in general. But how much change are law firms willing to embrace to meet those challenges? The “2019 Law Firm Business Leaders Report: Outlook for U.S.-Based Local & Regional Firms” interviewed law firm leaders.
They are generally optimistic about the opportunities for growth. More than 60 percent believe revenues-per-lawyer and profits-per-equity-partner will increase over the next few years. Health care, real estate, corporate law and IP were the practice areas identified as most likely to grow billings.
However, top risks are fee pressure from clients, competition from other firms over fees, awyer recruitment and retention, general economic pressures, cost pressures on litigation matters, and underperforming lawyers.
Law firm leaders perceive a noticeable divergence in how they — the people tasked with ensuring the long-term viability and growth of the firm — are willing to embrace and drive change compared with rank-and-file partners that may favor maximizing current compensation models over long-term investments. Most firms appear to be relying on trusted but perhaps dated strategies to improve performance while seeming are less likely to explore more potentially radical solutions like re-examining compensation or practice structures or adopting advanced technology to reinvent their legal service delivery model.
Overall, the responses provide an interesting look into how these business professionals approach today’s legal market. They also raise some interesting questions about possible paradoxes in the responses. For example, respondents are quite bullish on the possibilities for growth in both revenue and profits per lawyer at their firms, but they also are concerned about the chances for growth in rates, productivity, or realization on their bills. The report explores this and other questions about the responses in greater depth.
