With 88 per cent of firms saying they have chronically under-performing lawyers, the research also reveals that equity partners are not sufficiently busy in 52 per cent of firms, and non-equity partners aren’t busy enough in 61 per cent of firms. Overcapacity is diluting profitability in 61 per cent of law firms. Altman Weil’s 2017 Law Firms in Transition Survey reveals a legal market characterised by an endemic erosion of demand for law firm services, increasing price competition, a need for greater efficiency in service delivery, an influx of new kinds of competitors and the inexorable force of technology innovation.
Cutting office space, under-performing lawyers, excess staff, and low margin practices and offices are yielding immediate bottom-line results. Lateral acquisitions and investments in business development, while widely pursued, are less effective drivers of profitability at least in the short-term. Meanwhile one in two law firms report they are actively engaged in experiments to test innovative ideas and methods. These initiatives run the gamut from technology and data analytics to new business ventures, efficiency, pricing and staffing improvements, and efforts aimed directly at client engagement and retention.
Resistance to change
Two in three of law firm leaders say their partners resist most change efforts, and 56 per cent say most partners are unaware of what they might do differently. This reluctance to change is an intractable problem in many law firms.
Conducted in March and April 2017, the Law Firms in Transition Survey polled Managing Partners and Chairs at 798 US law firms with 50 or more lawyers. It is available to download at: www.altmanweil.com/LFiT2017