Each year I read the Annual Report on the State of the Legal Market presented by The Center for the Study of the Legal Profession at the Georgetown University Law Center and Thomson Reuters Peer Monitor.
I wrote about the 2015 report last June: Clients: The Problem with Law Firms Rewarding Hours.
Here is a link to the 2016 Report which every law firm leader must read. If the report last year was pessimistic, the 2016 report is even more pessimistic.
As in some of the previous reports, the researchers state:
Increasingly, clients are demanding more “value” in return for their legal spend, and by value they mean greater efficiency, predictability, and cost effectiveness in the delivery of legal services.
The researchers find that law firms are reacting to this new environment passively if at all. Having begun the 2016 report by describing the demise of Kodak, the researchers suggest:
The reactions of the law firm market to the rapidly changing environment in which firms operate parallels in some respects the story of Kodak.
I could share with you many other quotes warning law firms they need to change and change quickly. But, you and your colleagues need to read the report.
With your clients are demanding greater efficiency, predictability and cost effectiveness, what can you do?
Clearly the law firms who embrace and proactively meet those demands will quickly differentiate themselves.
I believe one way to become more efficient, predictable and cost effective is to hire the most highly motivated lawyers and train, develop and retain that talent.
Instead of managing lawyers, firms need to change their focus to leading, coaching and mentoring them.
There are four things over which your law firm has complete control:
- To whom your firm makes offers to hire,
- How well you train and motivate your lawyers and staff,
- How efficient, predictable and cost effective you are
- And, whether you embrace these changes in a proactive way or wait for your clients to insist that you change.
George Bernard Shaw famously said, and Robert Kennedy ended each of his speeches with:
“You see things; and you say, Why? But, I dream things that never were; and I say, ˜Why not?”
According to the report, most law firms see these signs of growing client dissatisfaction as problems. I see them as a tremendous opportunity for law firms open to changing their focus from profits-per-partner to service, cooperation and collaboration.
Interestingly, I believe over time making that change will actually result in greater profits per partner.