More than half of equity partners aren’t sufficiently busy at work, a greater number of non-equity partners don’t have enough to occupy their time, and close to nine in 10 law firms have chronically underperforming lawyers, an industry survey reports.
Those are among the findings of legal consulting company Altman Weil’s 2017 Law Firms in Transition Survey released Tuesday. More than 386 law firms of 50 or more attorneys responded for the ninth survey, painting a picture of a legal market characterized by an endemic erosion of demand for law firm services, increasing price competition, a need for greater efficiency in service delivery, an influx of new kinds of competitors and the inexorable force of technology innovation, Altman Weil said in announcing the survey results.
“Law firms are slowly changing in response to market pressures,” said Altman Weil principal and survey co-author Eric Seeger. “Progress is not linear in most firms — not every effort is an overnight success, and many firms are making only cursory investments. But we’re starting to see that certain investments are paying off.”
Among key findings:
- 88 percent of firms say they have chronically under-performing lawyers. Equity partners are not sufficiently busy in 52 percent of firms, and non-equity partners aren’t busy enough in 61 percent of firms. Overcapacity is diluting profitability in 61 percent of law firms.
- Only 30 percent of law firms routinely link discounted, capped and alternative fees to changes in how work is staffed and delivered — displaying a critical misunderstanding of the interdependence of the elements of their business model, which include scope, staffing, price, work flows, project management and margin.
- 50 percent of law firms are actively engaged in experiments to test innovative ideas and methods. These initiatives run the gamut from technology and data analytics to new business ventures, efficiency, pricing and staffing improvements, and efforts aimed directly at client engagement and retention.
- 65 percent of law firm leaders say their partners resist most change efforts, and 56 percent say most partners are unaware of what they might do differently. This reluctance to change is an intractable problem in many law firms.