After weathering a volatile year, the legal profession has returned to a tentative state of normalcy, but market pressures, regulatory uncertainty and innovations in technology will alter the way firms and legal departments manage themselves, according to a report released Tuesday by Major Lindsey & Africa.
Both inside and outside counsel will face challenges in recruitment and cost pressures, owing to lingering political and economic unpredictability, which will put pressure particularly on middlemarket firms and corporate legal departments to refocus on running their operations to deliver legal services with greater efficiency, the report said.
“While law firms are being asked to charge less for doing more, legal departments are being asked to do more with less," the report said. "As the legal industry sets an even sharper focus on profitability, law firms and corporations are turning to analytics to evaluate productivity and growth, spot emerging business trends and build new pricing models.”
Among outside firms, the report predicts no slowdown in the trend of increasing stratification between massive international law firms and middle-tier firms, whose success and longevity will be determined by their ability to concentrate on core strengths and to implement new strategies aimed at efficiency, talent retention and offering clients enhanced services.
"If I were to pick any one thing that is really changing these law firms and how they operate, it’s practice management," said Amanda Brady, global practice leader of law firm management at Major Lindsey & Africa. "These days they are essentially mini COOs for the practices, and they're responsible for everything that happens in those practices."
Rather than focusing strictly on expansion, firms are recognizing the need to bolster existing operations by bringing on management professionals to lead efforts in business development, recruitment and technology, among other areas.
“We use the expression ‘You know who you are,’” Jeff Lowe, global practice leader of Major Lindsey & Africa's law firm practice group, told Law360 in a recent interview. “You know what you want to be, you know who your client base is, versus the firms looking at other firms and saying, ‘We’re going to try to emulate that.’ But they don't have nearly the same client base or platform on which to do it. Which I think is what a lot of firms were doing between, say, 1990 and 2010.”