Aderant Think Tank: What Keeps You Up at Night?aderantuser
Are you losing sleep worrying about your firm?
Successfully running any business is challenging enough in this economy, but law firms face a particularly cool climate. As the Wall Street Journal wrote in January, “Don’t expect things to warm up anytime soon. By most accounts 2013 was another lackluster year for U.S. law firms, marked by stagnant demand for legal services and only minimal increases in lawyer productivity.”
We did some research of our own and spoke with several legal consultants to find out what firms are most concerned about in 2014. While each firm has its own issues and goals, the fears consistently fell into a few key areas.
1. Declining Profits Per Partner
Flat or declining revenues is a source of worry for any business leader. Georgetown University’s 2014 Report on the State of the Legal Market noted that “continuing sluggish demand growth, persistent challenges of low productivity, ongoing client pushback on rate increases, and a continuing struggle to maintain discipline on expenses.”
2. Losing Key Clients
As the legal recruiting firm Major, Lindsey & Africa noted in a recent report “the global demand for legal services… has contracted. Supply exceeds demand, clients are fully aware of that fact and have grown increasingly comfortable demanding rate concessions from law firms. Competition for clients is fierce and will continue to grow.”
3. Lack of Urgency to Change
The Wall Street Journal story also reported that “while law firm leadership seem aware of fundamental shifts in the market, ‘there is less evidence of tangible changes in how law firms operate.’ Complicating matters, most said their colleagues were not as tuned in to the challenges, citing ‘internal drag from partners who don’t fully understand the need for change, who don’t feel any sense of urgency to change, or who are simply resistant to doing things differently.’”
Of course these are just a few of the issues that may plague your sleep! Offer your own observations in the comments below (or on Twitter) and feel free to add any context to these areas of concern.