Challenges For Corporate Law Firms
Challenges For Corporate Law Firms In the Decade Ahead - New Report Shows
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Eversheds Report Discusses Work-life Balance and Other Trends Affecting Law Firms in the 21st Century
Leading UK-based, international law firm Eversheds has produced a report on the 'law firm of the future' - what both lawyers and clients expect from law firms - with some interesting surprises.
The report was commissioned by Eversheds from specialist legal research company RSG Consulting, to take a look into the future of law firms 10 years from now, specifically the top 25 firms by turnover. RSG also surveyed 50 top partners of the leading law firms in the United Kingdom and 50 general counsels, legal directors, and finance directors of some of "the world's most prominent companies and investment banks."
Although part of the purpose of the study was to examine the impact of the UK Legal Services Act, many of the report conclusions have compelling relevance to law firms practising in Australia and New Zealand.
For instance: how will the law firm of the 21st century look? What challenges will it face? Will work-life balance continue to be important to lawyers? What will happen to the billable hour? How can law firms improve their commitment to diversity?
One of the interesting aspects of the survey is that the report interweaves the perspectives of law firm partners and clients, showing where those perspectives agree and where they diverge from one another.
Key findings were the requirements for clients to both control their legal costs and also obtain better value from their lawyers. Although the role of the hourly fee is likely to remain, with over 80% of lawyers and clients believing it will still be here in 10 years time, many corporates nevertheless believe there need to be more commercial, transparent billing arrangements whereby risks are shared by clients and lawyers alike.
There was also a clear feeling that the rate of high fee growth cannot be sustained and there will be more 'value billing'.
Also significant from the UK perspective was the impact of the major 'Magic Circle' firms, whose importance is likely to diminish somewhat as clients see themselves shopping outside of the City's major, legal marketplace and spreading their work among other firms.
Further, the trend toward "commoditised" provision of legal services, while likely to continue, is also something that has not found favour with many clients requiring services from top, corporate practices.
Rather, clients expect tailored, specialised service and value. But they require it to be delivered with a close eye on commercial considerations and there is a perceived requirement for additional, commercial consulting services as well as legal advice from the major firms.
Work-life balance is another key issue. Somewhat surprisingly, given publicity over work-life issues in major law firms, partners were generally happy (at least 77% of them though their firms were good places to work and a third thought their workplaces had improved in recent years.)
The report found that law firms will likely attempt to improve attorney retention by offering alternative career paths for lawyers and responding to the aspirations of "Generation Y" although work-life balance issues remain a tricky issue for Gen-Y employees.
The report also noted a major gap in perception between law firm partners and associates concerning work-life balance and attorney satisfaction. Despite partners' satisfaction associates are expressing discontent over work-life balance issues.
About 40% of both partners and clients believed that flexible working could satisfactorily address work-life balance issues. However, about 56% of partners and 45% of clients felt that flexible work arrangements would not be a feasible solution, particularly in the transactional areas of law practice. One client's comment illustrates the competing interests that will continue to make work-life balance a challenge: