Posted by: johnocunningham | June 18, 2012

Encouraging Signs of Law Firm Metamorphosis

Law firms have to adapt to changing times, just as businesses do. They have to figure out how to serve clients better, faster and cheaper to survive. For a long time, this fact of life has been  hard to embrace for lawyers, who have often shunned or reluctantly acknowledged that they must run their operations more like a business in order to be competitive.

Now, however, there are signs that change is being embraced by the vast majority of law firm leaders,  who are seeing the need to focus more on clients and sustainable growth than short-term profitability, something that leading businesses have realized for some time.

Skeptics might want to check out the 2012 Law Firms in Transition Survey by legal consulting firm Altman Weil. The survey results are based on responses from law firm management at 238 U.S. firms of more than 50 lawyers, including 40 percent of the 250 largest firms.

Participants ranked “clients” as their most frequent management concern (one of the top three concerns for firms of every size, except for the titanic firms of more than 1,000 lawyers) and they demonstrated in their comments a concern with becoming more proactive and cost-efficient as service providers. Law firm leaders also recognized the need for better understanding of clients’ industries and their businesses, showing that they are hearing clients loud and clear. Profitability, by contrast, was ranked as a top three concern only by leaders in the smallest size firms (less than 100) who struggle with keeping larger competitors from poaching their most profitable lawyers and practice groups.

The entire survey is worth reading, as it also provides explicit comments from law firm leaders on their particular concerns about competition, growth, profitability, succession, attracting and retaining talent, and other topics.

 

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