Introduction
The legal industry experienced significant uncertainty and change during the COVID-19 pandemic, leading law firms to reevaluate their traditional approaches. Despite the challenges, there was a fundamental shift in how law firms view their workplace.
We conducted a survey among law firm leaders, highlighting the need for new workplace models and identifying drivers such as adapting to the labor force of the future and improving service delivery. The future workplace will be influenced by shifting labor market dynamics, digitization, service transformation, revised administrative roles, talent development, office space utilization, and new policies and physical design.
Despite the spikes in uncertainty, COVID-19 has spurred a fundamental pivot in how law firms think about their workplace.
Designing the workplace of the future: balancing demand and supply
Law firms, motivated by the transformative effects of the COVID-19 pandemic, are presented with a rare chance to reshape their workplace. However, amidst this transformation, it is crucial to prioritize the effective delivery of legal services to clients. The future workplace must offer a flexible and conducive platform for lawyers and support staff to interact with clients, deliver their work, and enhance their skills without compromising client service.
Assessing demand for space
The survey reveals that three-quarters of law firm leaders expect a decrease in their use of office space in the near future, with 28% anticipating a significant reduction. This trend is observed across firms and markets nationwide. Factors influencing space demand include the firm's growth strategy, service delivery model, and the continuum of virtual working options. Many firms are considering outsourcing, virtual delivery, and centralization, including the establishment of remote shared services centers. As firms reassess their workspace, the focus is shifting from individual offices to shared and collaborative spaces that foster interaction, collaboration, culture-building, and learning opportunities.
Resetting supply
To align office space with demand requirements, law firms should strategically evaluate their current space and explore future supply options. This involves assessing lease commitments and flexibility, as well as envisioning alternative space solutions. Many firms are expected to reduce their space by 25 to 35% as leases expire and are reset according to new requirements. Firms should determine priority markets for client-facing teams and consider centralizing support services in shared services centers. Embracing enabling technologies, such as scheduling services, workflow management, and collaboration tools, is crucial for efficient resource allocation and space utilization. Workplace policies should include office sharing, hoteling, reducing office sizes, and increasing collaborative spaces to enhance productivity and reduce space needs.
We believe greater space reductions are possible as the industry continues to evolve and firms continue to evaluate their supply versus demand.
Overaching considerations
- Labor market dynamics are in flux, with workers reevaluating their priorities and preferences, making talent acquisition and retention challenging.
- Leadership and governance should involve a comprehensive effort, with COOs, CFOs, office managing partners, practice leaders, and HR and real estate heads playing key roles.
- Firm cultureneeds to be maintained and instilled in new hires, even with remote working models and new workplace strategies.
- Talent mentorship and growth have been impacted negatively by the pandemic, requiring new approaches to talent growth and creating opportunities for collaboration and interaction.
- Diversity, equity, and inclusion must be ensured in remote work settings, as physical and relationship disconnects may inadvertently favor certain individuals.
- Regulatory and tax considerations come into play when implementing remote and virtual working models, requiring compliance with data privacy, licensing, accreditation, and tax requirements.
Conclusion
Law firms are experiencing lasting changes in how and where they operate due to the prolonged impact of COVID-19. To prepare for a return to more communal spaces, firms should consider the diverse space needs across roles, levels, functions, practices, and locations. It is important to involve and listen to input from various stakeholders to empower and maximize the potential of both the firm and its people. Strategically designed changes in the workplace, along with other pillars of firm functioning, will contribute to greater success, flexibility, and efficient delivery of legal services. Failure to adapt could result in economic losses and hindered ability to compete in the legal industry.
To read the full report, download the PDF.
- Business operations
- Change management
- Digital roadmap
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