What Is Your Firm Waiting For? Study Spotlights Opportunities for Small Law Firms
Joy A. Long
A new study from the Thomson Reuters Legal Executive Institute (LEI) suggests that many small law firms (firms with fewer than 30 lawyers) are largely too focused on maintaining the status quo within their firms. The 2019 State of U.S. Small Law Firms finds that while these firms are well aware that they face numerous challenges, many are still not taking the necessary steps to address and correct the issues. This blog reviews the study and the opportunities awaiting small firms.
According to LEI, this means that valuable opportunities await “first movers” who are willing to take the lead. Any attempt to innovate and improve will set small firms apart from their peers who resist change.
The study found that one of the most common challenges for small firms is the acquisition of new client business. Every law firm segment surveyed (solo, two to six attorneys, seven to ten attorneys and 11 to 29 attorneys) identified this as their primary “significant challenge.” This is no surprise because all firms, regardless of size, need a steady stream of business.
A large percentage of each segment also expressed at least moderate concerns about:
- The amount of time required to perform administrative tasks;
- Controlling costs;
- Staying on top of developing technologies;
- A lack of internal efficiency;
- Keeping up with competitors;
- Getting paid; and
- Clients demanding more for less.
In the three years that LEI has conducted this study, the same issues have consistently been identified as the greatest challenges for small law firms, with relatively small numbers of firms taking proactive steps to deal with them.
Actions to Consider
For those firms that are re-examining their businesses, technology is often the first place they look. LEI considers this encouraging, as technology lies near the root of any solution to most of their concerns.
Which technologies are trending? The firms that were surveyed are investing in staple technologies like time and billing, conflict checking, case/matter management and financial/accounting tools. Document drafting and document management tools become much less common in firms with fewer than 11 attorneys. These technologies could go a long way toward accomplishing goals such as improving internal efficiency and client service delivery.
Other reported changes can improve firm efficiency, too. Those include changing staffing ratios, shifting work to those with lower billable rates, and mapping and refining practice workflows.
Many firms that have focused on becoming more efficient have seen positive performance outcomes. In fact, solo firms reported that greater efficiency was the single most important factor driving positive outcomes. For the other segments, focusing on client relationships and business development was identified as the single most important factor driving positive outcomes.
Law firms that continue to resist change and maintain the status quo risk falling further behind in an ever-evolving legal sector. It’s time for small law firms to shift from awareness of challenges to focusing on actions that will help them seize opportunities.
For more information, contact Joy Long at email@example.com or 312.670.7444. Visit orba.com to learn more about our Law Firm Group.