Why Law Firms Don't Keep Up With a Changing Marketplace
The legal marketplace has changed dramatically over the last decade: the Great Recession halted the legal boom of the mid-aughts, putting a renewed focus on value and efficiency in BigLaw, while the rise of online legal services has undercut business that was once handled by smaller practitioners. But as the legal market has evolved, many firms haven't been able to keep up.
What's the reason so many firms are falling behind? Many of those at the top don't know how to do things differently and aren't willing to try.
A Less-Than-Ideal Legal Marketplace
It's not the worst of times for lawyers today, but it's certainly not the best of times either. While the legal industry is starting to crawl out of the whole caused by the most recent recession, it has yet to make a full recovery, as Altman Weil's 2016 "Law Firms in Transition" report shows.
Law firms are still seeing a slowdown in profitability, with 47 percent reporting lower profits per partner, while only 38 percent have seen demand return to pre-recession levels. And almost all firms believe that a focus on efficiency is here to stay; 93 percent identified the need to improve efficiency as a permanent trend -- but not a trend they're ready to get on board. Only 44 percent of firms reported making changes to increase efficiency.
What's Keeping Firms From Evolving?
When it comes to adapting to the new legal marketplace, many firms are their own worst enemies. Partners know things have to change, yet they are reluctant to make changes themselves. Over 60 percent of firm leaders say partners are resistant to change, according to the report. The rest are simply clueless. Fifty-four percent of firm leaders said that partners were unaware of how things might be done differently.
And most lawyers don't have much confidence in the future. Just over seven percent of firm leaders said they were confident that their firms could keep pace with a changing marketplace.
But, hey, don't let this bad news get you down. Instead of despairing about the legal industry's intransigence in the face of a changing marketplace, smart lawyers will get out head of the curve, improving their efficiency, exploring new customer bases, and adapting to new technologies. While the rest of the legal industry willfully sinks, you can start learning to swim.
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