Introduction
As law departments and law firms develop go-forward strategies in the post-pandemic environment, their people are a critical consideration. Legal organizations’ teams have been challenged by, and been the catalysts for, considerable change in recent years. They are the foundation of law departments and firms, delivering services and at the same time driving organizations’ investment decisions regarding real estate, technology, and more.
Legal Lab 2022 participants grappled these questions:
- How can we best develop, engage, and retain our talent?
- How can we create additional capacity to provide legal services?
- How can we leverage technology to support law departments' and law firms' talent strategies?
Trends update: What's driving change in the legal industry
Legal Lab 2022 began with a discussion if industry trends, based on our 2021 Law Department Survey and Sounding Board series of roundtables.
Law departments
The vast majority of law department leaders (84%) predicted increased demand for legal services in 2022, with a focus on data privacy, cybersecurity, regulatory matters, contracts, and mergers and acquisitions. But that need is not balanced by increased spending on outside counsel and other service providers. Rather, spend is growing moderately or not at all for many law departments as they try to keep costs relatively stable. Law departments are also implementing more measures to keep outside counsel spending in check.
So, how are internal teams keeping up with demand? Many are continuing to bring more work in house: 56% of organizations planned to hire more lawyers, while 42% anticipated hiring new support staff and 23% planned to hire new legal operations professionals.
In-house leaders participating in our Sounding Board Series displayed an optimistic outlook for 2022, with nearly half (47%) anticipating a moderately increased or steady budget (24%) for the new year.
Law departments continue to trend favorably in their in-house hiring outlook, with anticipated increases in lawyer, support staff, and other specialist headcount.
Law departments are also exploring agile staffing models, including alternative legal service providers (ALSPs), to scale their workforce and handle tasks like e-Discovery, document review, contract drafting, and intellectual property.
In response to the Great Resignation, law departments are focusing on talent engagement and retention by developing core competencies, offering alternative career paths, and building a diverse pipeline of future talent for legal and law-related roles.
Notable market movement is anticipated in process automation-based tools for law departments.
Law firms
Law firms are refocusing on client service to gain a competitive edge, adopting a comprehensive approach from intake to matter conclusion. They have introduced new roles like client experience officers and are streamlining client and matter intake processes to enhance relationships. To address financial challenges and improve lawyer retention, firms are investing in talent development, offering alternative career paths, and reshaping service delivery to reduce burnout. They are forming multidisciplinary teams, utilizing technology, and communicating the benefits of their investments to clients to create greater value and build a resilient practice for the future.
Talent: Creating the best employee experience
In the pandemic era, law firms and law departments are facing a myriad of talent-related challenges and opportunities, particularly related to attorney retention, development, engagement, and management.
Law firms are emphasizing the need to formalize resource management, align career paths with work allocation practices, blend DE&I and resource management initiatives, and transform support services to create enabling capabilities. Law department staff-related focuses include training and development, resource optimization, diversity, and employee well-being.
Attorney training and recruitment
To meet clients evolving needs and to meet the changing preferences of law students and lawyers, law schools and firms should consider expanding legal education to include firm management, client service, and legal operations. Law firms must also ensure their lawyers understand the business aspects of law to meet the expectations of law departments and improve client service and retention.
Talent engagement and retention was a top priority for law departments heading into 2022.
Lawyer engagement and retention
Compensation alone is not sufficient for retaining and engaging younger lawyers; they value advancement and learning opportunities, such as development programs and secondments. Legal organizations should also consider developing new and alternative career paths. Law department Legal Lab participants had mixed views on developing employees, however, with some not wanting to train them for another organization's potential benefit. Others emphasized the importance of prioritizing what is best for the industry and individuals.
But because not everyone will stay at the same firm through their career, law firms should focus on creating well-structured career paths that allow lawyers to leave gracefully, embracing turnover as a natural process. Lawyers who leave may become potential sources of work if they go in-house and, if they return pursuant to a firm's "boomerang" strategy, can save the firm recruitment and onboarding costs.
Service delivery: Improving the client experience
Law firms and law departments are striving to enhance service delivery, with firms creating new client-focused roles and law departments seeking top-notch service. However, meeting law department expectations requires more than just dedicated roles.
What law departments expect from outside counsel
In-house attendees expect their outside counsel to act as an extension of their teams, being proactive in anticipating legal issues and offering strategic advice based on a deep understanding of their business. Firms building strong relationships with in-house counsel is crucial. They should showcase their strengths, offer no-cost CLE programs, and explore opportunities for on-site shadowing to enhance collaboration.
Some law firms may fall short in being proactive and strategic, with instances of counsel talking down to in-house teams or attempting to drive decisions without collaboration. Law firm partners need to recognize that strategy is a business decision and should engage in open discussions with in-house teams to make informed choices.
How law departments can help law firms be good service partners
Interaction between a client's legal operations team and law firms is crucial. Some firms have met with clients to understand and align with their operations teams, recognizing the significant ROI and value gained from such exercises. But such interactions are often rare, leaving law firms seeking more insights into clients' operational setups.
Law departments are willing to invest in initiatives to help outside lawyers deliver greater value, such as establishing boot camps to review company culture and guidelines, or holding monthly seminars for new firms to learn about billing and communication protocols. But time constraints pose a challenge for both law departments and law firms, making it difficult to go the extra mile for all clients beyond a select few top firms.
How legal support functions are evolving
Law firms are rethinking service delivery for a number of reasons, including the high associate turnover rate that has seen firms losing almost a quarter of their associates per year.
Compensation alone doesn't address high turnover in law firms, and firms are now focusing on reducing frustration and burnout among associates. For example, firms are shifting non-lawyer tasks from associates to paralegals and creating new adjacent roles, such as closing specialists and coordinators to alleviate administrative tasks and allow associates to focus on core lawyering responsibilities.
Law firms are also reshaping the roles of legal administrative assistants and paralegals, creating legal support teams to enhance efficiency and remove silos, integrating professional resources into practice groups. Practice-enabling support functions, such as knowledge management, innovation, legal research, data analytics, and practice management, are also consolidating under the leadership of knowledge and innovation professionals in law firms.
How data is enhancing service delivery
Law firms and law departments are increasingly using analytics for better decision-making and to support the business and practice of law. Analytics tools are being utilized for talent management, matter management, predicting case volumes, setting pricing, and identifying opportunities for proactive client engagement. They are also being used to inform deals, predict outcomes, and assess potential risks in legal matters.
What capabilities law firms and law departments need to move forward
Law firms need to improve their pricing transparency and provide benchmarking data to support their pricing decisions to build better client relationships. Corporate law departments expect firms to reduce the cost of legal services while improving quality, and they are willing to hire firms that pass on cost savings rather than increasing profits per partner.
Technology: The continued battle for adoption, efficiency, and collaboration
Law firms and law departments are embracing legal technology to enhance operational productivity, foster innovation, and improve collaboration with clients. They are investing in tech tools for automating tasks, storing data in the cloud, and enabling remote work, with law firms utilizing tools for client interface, service delivery, business operations, data management, and information technology, while law departments employ various tools for their specific legal needs and across the organization.
Using technology to fill gaps and solve problems
As legal tech adoption grows, organizations are using sourcing tools, subscription models, and AI to accelerate solutions and drive efficiency and quality. Examples include a legal sourcing tool that streamlined bidding for litigation matters, a subscription-based content solution for privacy and employment issues, and AI tools facilitating agreement negotiations and understanding insurance policy language.
Building digital fluency
Law schools are embedding technology in their curriculum, leading graduates to seek tech-savvy organizations and leverage technology in their work processes. However, some lawyers in law firms and departments still resist technology adoption. Overcoming this resistance involves setting "digital fluency" goals, having key influencers evangelize technology, promoting technological competence, and reassuring the legal team about their future by retraining them for higher-value roles in the face of automation.
Streamlining workflows and client interactions with collaboration technology
Collaboration tools are becoming increasingly important, with firms and law departments progressing through fundamental levels of collaboration, such as file sharing, chat, virtual meetings, and shared calendars. Tools like the Microsoft 365 suite connect people, processes, and data in a centralized location and simplify communication. While tools like Microsoft Teams streamline communication, co-authoring, and knowledge access, not all lawyers adopt them, raising concerns about privacy and discovery costs related to chat data in platforms of that nature.
There are opportunities to explore more advanced and optimal levels of collaboration through technology solutions, with the key to success being the alignment of tools with practice needs and boundaries for closer collaboration between law departments and firms.
Workshop: Balancing the drive for performance with compassionate leadership
In a concluding workshop, participants discussed how to balance the drive for performance with compassionate leadership in the current environment.
Smart collaboration
As a preface, participants discussed smart collaboration, highlighting the importance of diverse networks and collaboration in the legal profession. A broader network can lead to greater productivity due to market intelligence, business insight, and stronger leadership and trust-building skills.
The compassion-performance tradeoff
Leaders must recognize that legal professionals need flexibility, understanding, and compassion to fuel their performance. Workshop facilitator Heidi K. Gardner suggested the following principles for maximizing compassion while minimizing pressure, stemming from her book Smarter Collaboration:
- Plan for the onslaught of pressure by understanding your behavioral tendencies and encouraging your team to do the same.
- Plan how your compassion will play out in a crisis by putting structures in place that will facilitate understanding and communication.
- Avoid the avoidable by managing yourself, for example, by getting enough sleep.
- Manage others, by providing peer counseling to those who are mishandling pressure.
- Look outside the organization to make sure those interacting with your team are treating them compassionately.
- Manage the pressure by balancing a sense of urgency with the positive energy needed to achieve the goal.
To read the full report, download the PDF.
- Business operations
- Diversity
- Innovation
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