Law Firms Want Change, But Still Ponder Next Steps, Report Finds

May 14, 2014

5273Law firms know they need to change. What changes need to be made, however, is a question for which answers are elusive.

That is the overall impression given by Altman Weil’s most recent “Law Firms In Transition” report. For this survey, the legal consulting group polled 791 U.S. law firms with 50 or more attorneys. It received 238 responses. Thirty-seven percent of the country’s largest 250 law firms answered the survey.

First, the survey sought to assess the present state of mind of law firm leaders. It found that lawyers are worried that demand for legal work is static or shrinking, feel “real pricing pressure” from clients and have recognized the threat posed by low-cost, non-traditional legal service providers like Axiom.

So, it would seem that most law firm leaders who responded recognize that change needs to occur because they are not comfortable with the status quo. However, there is “less evidence of tangible changes in how law firms operate,” as the report tactfully puts it.

Many law firms have outsourced some non-legal functions and reduced overhead, and have seen some cost reduction as a result. When it comes to changes that are more difficult to make, such as a strategic and consistent approach to profitable alternative fee arrangements and promoting a firm structure that does not entail so many equity partners, there is less concrete evidence that actual changes are being made. All in all, it seems that perhaps the low-hanging fruit has been picked and next steps, in terms of economic reform, have yet to be decided upon.

Assessing the report as a whole, it is good that law firm leaders appear to recognize that change is essential, even if that knowledge takes the form of concern about the future. It would be heartening to hear that law firms had collectively realized effective and sustainable changes that would help them adapt to the future of the legal industry, but perhaps that will come with time.