But let's not overlook the important similarities that exist. Mid-tier firms can use the same advanced technology tools and tactics to boost operational efficiencies as their larger counterparts. After all, no law firm drives profits by having lawyers perform administrative work.
Given the new legal market realities uncovered in recent market research by BigHand, it's time for many mid-tier firms to think differently about their future. Adopting modern technologies makes it easier than ever to seize the latest opportunities. Mid-tier firms' relative agility can magnify the resulting benefits, empowering them to compete with larger firms, win new business, and deliver even greater value to clients.
Legal market trends threaten profits for mid-tier law firms.
Recent research by BigHand found that while 75% of North American and UK law firms surveyed report declining demand for legal services in the past year, that figure rises to 80% for mid-tier firms. A staggering 85% of mid-tier law firms expected demand to decrease further in the coming year.
Faced with diminishing revenue, 21% of all law firms became willing to accept lower profit levels. Among mid-tier firms, however, this number increased to 28%. Furthermore, 21% of mid-tier firms anticipate reducing their profit per partner (PPP).
The shift to hybrid work created new operational challenges. A striking 46% of mid-tier firms said they’d been underutilizing their support staff due to remote working arrangements—a troubling number as it indicates many lawyers are taking on more administrative duties.
Mid-tier firms will also likely face pronounced repercussions as 75% expect up to 40% of their support staff to retire in the next five years. They may struggle to invest in new staff and training with fewer resources to draw upon than larger firms.
It’s become clear that mid-tier law firms must quickly implement measures to maintain and grow profits. Embracing the technology tools larger firms use to streamline operations and optimize resource utilization can deliver fast ROI at manageable costs.
Creating workflow efficiencies for mid-tier law firms
Twenty-two percent of mid-tier firms plan to incorporate technology as a prime driver of efficiency and better resource utilization. Mid-tier firms are developing more efficient systems to route work and collaborate across locations, and they are using the same tools as their large-scale counterparts to optimize workload delegation and improve overall efficiency. As a result, they can:
1. Understand existing resource capacities.
To delegate work effectively, lawyers must know what resources are available. Legal workload management systems provide insights into staff capacities and workload distribution for more cost-effective delegation decisions. Data analytics and customized reporting reveal essential KPIs such as task type, volume, capacity, and utilization rates. Firm leaders can make fact-based decisions about workloads, performance, and other factors to use resources wisely.
2. Embrace task delegation and tracking solutions for hybrid work.
Share and receive work seamlessly anytime to and from any location. Legal task delegation and tracking solutions automate the related administrative tasks traditionally managed by lawyers and staff. Technology systems can assign tasks to the most ideally suited lawyers and support personnel and track workloads to completion. Dashboards keep legal team members in the same loop, with notifications and updates readily available.
3. Prepare for tomorrow’s staffing challenges today.
Prepare now for the impending loss of staff knowledge and experience. Automated tools document valuable insights and make it easier to access information while establishing processes rooted in data analytics that cater to knowledge management and succession planning. Implementing efficient workload management solutions now helps smooth the transition when new talent steps in.
With workflow management technology and data-driven strategies, law firms of all sizes can secure a prosperous future. Lawyers can focus on billable activities and expand their capabilities to meet changing demands. Clients pay for legal expertise, not overhead.
Read the full report now and learn what you need to know to better equip your firm to navigate imminent changes.
