If 2018 was the year that introduced an Hors d’oeuvres of Change to the legal industry, 2019 was the main course served with all the trimmings. Law firms embraced new technologies, enhanced ways of working and process streamlining to facilitate new working practices all leading to refining client engagement. Highlights such as Lean Six Sigma and value stream-mapping became buzzwords in the industry as continuous improvements made law firms look internally at their own processes, whilst externally striving to get ahead in the race to make themselves more attractive to their discerning clients.
The UK, being under pressure throughout the year, whether via economic or political uncertainty, ensured that caution was a common theme across the board as firms needed to remain agile in the search for opportunities. Many firms found significant increases in their profits from their international offices, no more so than the top 10 firms who sourced nearly three quarters of their fee income from overseas.
Despite threats to the economy such as Brexit, a weakening Eurozone, tensions between the US and China, the UK market still held up showing resilience. Nine out of ten firms reported growth, albeit at a more sluggish rate than in 2018. US firms again usurped their UK counterparts with regards to profits.
With UK Profit Per Equity Partner being the key driver for any law firm, the upward trajectory was seen across the board. The financial investment shown by the introduction of technological change will be a repayment over the next few years, however, this investment is compulsory for firms to stay on top of the ever-changing cyber threat landscape. These outgoings in recent years have affected profits but will set a platform for stability over the next few years.
The introduction of pricing models across firms was the driver for success. The race for the best talent continued across the board as firms not only focussed on their recruitment but also their retention strategies. Employees held the upper hand with regards to how and where they work; a subsequent result of a shortage of staff. Flexible working enabled by investment in technology has been prevalent and will continue to be. The success of firms in the future will be those who adapt and change in this cultural climate.
Many challenges face law firm culture. Start-ups and fear of the unknown are two considerations for the top 100 firms as we enter 2020 with a new government who will decide how we sever from mainland Europe, if at all. Meanwhile the wheels of the legal industry continue to turn, with pressure on the staff employed to continue to provide a service to the clients.
If a sudden surge in growth were to happen, it would be interesting to see who can cope with the pressures of their business model and we can expect to see the continuation of mergers between law firms.
Whatever political or economic choices made in the next year shouldn’t change the ability for modern law firms to express themselves in both culture and behaviour as they continue to strive for success.