Post Pandemic Paradigm: the future of law firms

May 19, 2020 RSS

With the world stagnated like never before, law firms have had a glimpse at a potentially exciting new future, if they can understand and respond to the challenges. We speak with practising lawyers and law firm leaders, to gather their thoughts on the future implications and opportunities for the industry.

The current situation has forced a large part of the world’s population to reflect on how they spent their time previously, and how they will spend their time after the virus has passed. For law firms, the questions are quite complex, more nuanced than for many businesses and individuals in other industries.

Leadership teams need to focus on new process thinking

“The pandemic has highlighted the essence of the law firm process,” says one senior technology lawyer who has spent time as a partner in various top law firms, as well as prominent in-house roles.

“How do you get and keep the best talent? How do you train and develop people? How do you delegate effectively to them and supervise them? And who do you promote?”

“Currently, law firms work on the apprentice model – hang around with a partner, get told to do *this* in *that* way until you become a copy of your partner, and then you become partner,” he says. “But if we’re going to have a new – remote – world order after the virus, how do you build that? How do you scale a business like that?”

“COVID has shown that we can work effectively on a remote basis,” he adds. “Which raises the question why we haven’t done this before?”

The managing partner of a Top 20 UK firm has the answer for that.

“What had stopped us doing this before was the notion of presenteeism, which is code for lack of trust,” he says. “Partners just didn’t trust that people out of their sight would do what they were supposed to do, that if you were working from home you weren’t working ‘properly’. That myth is completely debunked now.”

“Our firm was already pretty far down the line in terms of agile/flexible working,” he says,  “so closing up our offices was at least technically feasible, but nobody really knew how aggregate performance would be affected.”

“When we turned people out of the office, we had one afternoon of a dip in performance,” he says. “But as soon as everyone was set up from a technical point of view, we were back to normal. In fact, I think people are working harder. No travel time means longer hours for many people. While many of them are fed up with the imprisonment, we now know we can trust people to work diligently wherever they are, and that’s massively liberating for a business. We’re not tied to bricks and mortar any longer. In the future, offices will be somewhere we can touch down, but that’s it.”

While we agree that trust is a very important part of the puzzle, inevitably, setting up and developing a fully remote working model will put the accent on the firm’s adoption and use of technology.

Technology – opportunity born through necessity

“This will be a massive boon for tech,” says our technology partner. “Dispersed or virtual law firms have, of course, been doing this for years, but this hasn’t happened for big firms. Now it is, and that could be a game-changer.”

“Practice management software in particular is going to become far more important, and the new world order will shift what is being measured through that technology,” he adds.

One in-house lawyer, another former partner in big international law firms, agrees, but is cautious about law firms’ ability to do what needs to be done.

“Law firms already record far more data about what individuals are doing than other consultancies,” he says. “But recording data is one thing, doing something with it is quite another. Law firms can’t even say when they are busiest during the day. Think how much of an advantage it would be to understand that in terms of smoothing workflow, deciding when to have strategy meetings, when to spend money, etc.” he adds.

“But they don’t. High level strategic use of data is missing in law firms. The market is ripe for change, but the only way it will change is if law firms see it’s an advantage for them to do so.”

The managing partner of the Top 20 firm ruefully agrees.

“We’re still obsessed with chargeable hours, ultimately,” he says. “I’m not going to spin you a yarn claiming we’re off that crack, though we’re not as demanding as other firms in that respect. In terms of assessing individual performance, we do take into account a lot of factors, but our business model is based on the premise that people do more than they’re contracted to do. We pay them 9.30am-5.30pm, but we only really make profit when they work to 7.30pm or 8.30pm. And that billing system is notionally open to abuse.”

Our technology lawyer is just as forthright, but sees opportunity in a scenario where partners will not be able to monitor juniors in person, but have to rely more on technology.

“Law firms measure what is easy to measure – the person who puts in the most hours,” he says. “But then the person who gets rewarded is the idiot who can’t get it done more quickly.”

“If management tools can notice who’s taking longer on the same tasks, you’ll also see, related to that, more people getting quality of life back. What might take a whole day in a busy office environment will take three hours at home.”

“That in turn allows firms to concentrate on wellbeing and that will have huge longer-term benefits. In essence, the law firm which promotes a dispersed, wellbeing focused environment will get the better people. And that will be far more appealing to the generation coming through.”

Our managing partner agrees. “I wonder whether – depending on how long this goes on – there will be a lot of people reappraising what life is all about,” he says. “If you’re 25, say, and working for a big US firm doing 2,500 hrs a year, I reckon a lot of people may do that reluctantly. They don’t enjoy it, they’re in it for the big bucks.”

“I think after this, there will be a greater proportion of people who will turn around and ask ‘what am I doing this for?’. Maybe they want a law firm that gives a little bit more, that’s more rounded, that is protective of all the things they’re about, including wellbeing.”

“We are all susceptible at times to feeling down and overwhelmed by stuff. You don’t get the opportunity to do that in my US firm example,” he says. “If you show signs of weakness, you’re damaged goods and out the door. However, I am a little sceptical,” he adds. “We have a tendency to change only when we are forced to do so.”

The War for Talent evolves…

Our in-house lawyer believes a grass roots movement for change may force the issue, intensifying the so-called ‘War for Talent’ around lawyer recruitment.

“Remote working is going to become a hygiene issue for lawyers coming through,” says the in-house lawyer. “If you, as a law firm, can’t offer a sophisticated remote working setup, they’re going to go for a place which can.” But he sees major challenges for law firms farther down the road.

“You have to think beyond recruitment,” he says. “How do you progress from associate to partner? How do you develop your clients? It will become much harder to pass on clients. Law firm brand reputation will count for a lot, but associates will need to start winning business through effective use of social media tactics.”

“How many law firms put out client updates on Instagram, for instance? Is it a good channel for the firm, probably not, but for the individual definitely yes – learning how to become an influencer by putting out small amounts of compelling content on a regular basis.”

“The huge question for law firms if we are to move to a remote working environment is how you’ll develop business online. We might see an entirely new breed of partner come up.”

 Firms that embrace the ‘new normal’ will thrive

No-one has a crystal ball, and the true effects of the current pandemic could take years to unfold. However, it is clear that what has worked in the past for law firms will not in the future; either not at all, or at least not as well as a more modern approach.

This will impact firms at every level in a myriad of different ways but, if we had to sum up the future for firms in one word, it would be ‘flexibility’. To thrive in whatever the ‘new normal’ will be, firms must be flexible in everything; agile deployment of talent, streamlined approach to physical premises, adoption of cloud technology, and perhaps even a different structural model.

It won’t be easy for an industry that has not always been at the forefront of change, but the firms that take this opportunity to evolve will reap the rewards and open up a lead on the laggards that may prove difficult to curtail.

Written by:

Guy Adams

General Manager, Leaders & Professionals Solutions

Intapp

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Mark Brandon

Managing Director

Motive Legal Consulting

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