BigHand’s market research found that 61% of firms are reducing prices in response to client pressure, but what is the best way to make firms more operationally cost-efficient that doesn’t result in lowering prices?
We’re seeing more law firms streamlining their support staff into a mix of centralized and direct models. BigHand has been observing this shift towards centralization for a number of years with more firms making the change in response to current market dynamics. Our recent market research confirms this shift as 93% of firms have said they have made changes to their support structures in the last two years.
59% of firms said they are seeking operational efficiencies through better staff utilization. Moving to a more centralized support staff model increases operational efficiency, productivity, and task turnaround times in a more cost-effective way. Along with visibility into support staff workloads and capacity, law firms can delegate work to the support team member at the right cost to the client with centralized teams. But what are the most common changes we’re seeing in the industry at the moment, and where should you start when considering centralization?
Support Team Evolution
BigHand’s market research has shown the different models law firms are adopting to respond to client calls for cost-effective resourcing and to increase operational efficiency. Of over 800 legal professionals surveyed, 63% say they expect their direct model to drop from 70% to 9% by 2025. This is a drastic decrease and shows firms’ awareness that the direct lawyer-to-PA model is not efficient, and they need to change how support staff work in the future. On top of a looming retirement, when asked by BigHand on what approach firms were taking, common models included:
- 35% of law firms are operating a 50/50 split between centralized teams and a direct lawyer support. Additionally,
- 27% of law firms have a 70% direct and 30% centralized support model.
- 23% of law firms expect to have 75% centralized, 25% direct support roles in the next 2 years.
The approach to centralization is varied but there is agreement amongst most law firm leaders that some sort of centralized team is needed to boost efficiency. But where is a sensible place to start? Many firms may have operated with centralized document production functions for years, but what’s the next step in the centralization journey?
From what I’ve seen with our clients, there are a few different structures to consider. These include:
- Centralizing teams by location and starting with the smallest office first. This is to get an understanding of how a team like this could work on a small scale first before introducing it to bigger offices where change is more of a short-term disruptor.
- Others are creating centralized support teams for first year-associates or junior lawyers by creating a lawyer resource center.
- Some have started with those teams most amenable to software introduction like corporate or litigation
New Roles for Modern Structures
Along with centralization, 40% of firms have introduced junior administrative roles in the last two years. Some of the new roles and teams I’ve seen firms introduce include:
- Admin Support Assistants for non-client facing work
- Legal Administrative Support Specialists (assistants to the assistants)
- Administrative Resource Team (non-client facing work, assisting legal PAs)
- Specialist software teams
- Special Projects Team for creative work that can be picked up by staff with similar interests
These new roles can support centralized structures as they are focused on specialized areas of work instead of directly working with one associate or practice group. People can grow their skills and progress their careers as multi-disciplinary secretaries.
Optimizing Operational Efficiency
In my experience at BigHand, we’ve worked with many firms who have found efficiency benefits by restructuring their support staff. Larkin Hoffman are a strong example of this progress. Before using a legal-specific workflow management tool, they averaged 3.58 attorneys per legal admin. That’s now increased to 4.28. This has reduced their administrative costs and has meant they haven’t needed to hire more legal admins to support the same number of lawyers.
By streamlining support services like Larkin Hoffman, law firms can leave behind outdated models and stay competitive with more modern firms. The move to centralization has been coming for years and with the current economic climate and hybrid working, law firms are making changes in order to be more operationally efficient and improve their overall profitability.
