May 20, 2014
In our most recent post, we discussed Altman Weil’s “Law Firms In Transition” survey and what it portended for law firms in general.
Today, let us take a look at what the report says about Midsized Firms specifically.
Midsized Law firms are worthy of special attention because they are good bellwethers for the industry as a whole, chiefly because they are well-positioned to embrace change. Unlike Large Law firms, they are not so big that changing course is too difficult, and they have more resources and capacity than Small Law Firms do to effect positive change
First, the survey found that leaders of Midsized firms (those with fewer than 250 lawyers) are like leaders of Large firms (more than 250 lawyers) in that they know change is going to significantly alter the legal industry. They seem to collectively acknowledge that non-hourly billing models, competition from nontraditional legal service providers and greater price competition are going to alter their ways of doing business.
It seems that Midsized leaders are also in accord with what the future may look like. They agree that the future Midsized Law firm will probably have fewer equity partners, more contract or part-time attorneys and smaller annual billing increases.
What they seem to be missing, though, is a bridge between today and that not-too-distant future.
For example, 44 percent of Midsized firms reported that their strategy for the future was built around locking in profitable partners. While retaining your current equity partners will assist in maintaining current revenue streams, it is important that the Midsized firms remain flexible enough to innovate and explore alternative approaches that might require short term sacrifice in exchange for long term viability.
The survey also indicated that Midsized leaders are not investing significantly in ways that will help them embrace the future. It seems safe to assume that means they are not exploring things like new technologies and workflow patterns.
All in all, it is a rather curious picture. Midsized firms seem to know that change is coming, and they seem to know what the legal industry will look like when that change has made its impact. And yet, they do not seem to be preparing themselves for this future.
As far as why that is the case, it may have to suffice to say that it is a lot easier to know what you should do than it is to actually do it. Given how foresighted and responsive Midsized Law firms have been so far, it seems fair to have a measure of faith that they will figure out the right approach eventually.