Ensuring your staffing strategy anticipates changes in client demand

Law firm staffing is under greater pressure today than ever before, putting the traditional pyramid structure under threat. Routine work that was traditionally given to law firms (which would use it to train up their first-year associates) is increasingly being given to new-model law firms and legal process outsourcing providers because they can get it done better, faster and cheaper.

Matters are being unbundled and divided between suppliers based on who can deliver each tranche most cost effectively. Legal fees are being pushed down under an ever-increasing spotlight on value for money, resulting in ever-shrinking profit margins. And, law firms are being instructed to work with their competitors to re-bundle matters and provide a seamless client service.

Meanwhile, law firms are also expected to use legal process optimisation and project management tools to avoid wasting clients' legal spend and provide a high-quality service. A key measure of that is the 'iron triangle' of project management - delivering a matter within an agreed budget, scope and schedule - something which law firms are not notorious for.

Most recently, the prospect of a full global economic recovery has resulted in some firms rushing to follow their competitors into 'hot' jurisdictions without doing the due diligence. But, increasing fee-earner numbers without a corresponding uptick in utilisation aligned with firm strategy is a dangerous game. As the English poet Rudyard Kipling said in 'If-', it's important to "keep your head when all about you are losing theirs".

So, think clearly about what space your firm can realistically fill
in the legal market in the short, medium and long term. Ensure you plan for a range of service offerings to accommodate peaks and troughs in client demand.

Next, seriously evaluate whether your firm's current leverage
ratio is optimised to enable it to compete in each service line.
For certain types of work, it may be more cost effective to use flexible staffing providers than to have a large pool of junior lawyers, for example. Or, it may make more sense to spin a business unit off from the main practice, as firms which have created flexible resourcing and offshore service centres have done.

Finally, put in place iterative plans to make your strategy happen. This may mean not hiring junior fee earners but instead buying in senior partners with specialist expertise in bet-the-company work. Or, it may mean making your firm a thorn in the sides of both traditional partnerships and new service providers by providing
the highest value commoditised legal work in the market.

By the time you have finished this analysis, it may well be the case that your vision of the firm's future is significantly different
from your current one. But, that's a lot better than walking into
the unknown, blinkered by unrealistic expectations.

Until next time,