How to Achieve Sustainable Growth
In an extremely competitive marketplace, it remains a priority for national and mid-sized law firms to continue to grow sustainably.
While many US firms have the luxury of deep pockets to invest in expensive Partner moves and high htreet firms are content to maintain a local client base, it is mid-sized law firms that need to prioritise sustainable long-term growth to establish themselves within the market. Often, they find themselves caught in the “sticky middle”, lacking a client base of multinational banks and financial institutions and also caught by rising costs in PI insurance and talent acquisition.
As Legal Recruiters, we often see law firms making significant investments in their people only for them to leave the business. Staff retention at Associate and Partner level is vital to any firm’s success. Meanwhile business development should always form part of any sustainable growth strategy. Increasingly within the legal sector, firms are responding to changing client demands by adopting more innovative approaches to their work to grow their market share.
Junior Associates have different expectations of their employers than their more senior predecessors. Particularly since Covid-19, priority is given to flexible and remote working. Generally, most law firms have adopted some form of a 2/3 day split between being office based and remote working, with the more adventurous firms offering additional agile working arrangements. By adapting to Associates changing behaviours and embracing change, law firms will be able to increase their Associate retention, lower onboarding costs and ultimately keep the best Lawyers within their business.
At the other end of the spectrum and equally if not more important to sustaining long term growth, is the importance of retaining Partners. At a more senior stage in their career, Partners are often seeking to contribute to the strategic direction of the firm. This can prove difficult, particularly following a merger where some Partners may feel marginalised, or a firm looks to change its strategy. However, due to the problem of the 'sticky middle' previously mentioned, we’re seeing more mid-sized law firms turn towards mergers as a means of pursuing sustainable growth. Following any merger, there is often some fallout, with senior fee earners leaving the new firm post-merger. In the case of traditional law firms, who have an Equity Partner model, they may often lose their Senior Partners who prefer the freedom of working in a consultancy-based model; though more on this later.
Successful law firms will improve their profitability by keeping their Partners, who typically have a well-established client base they can bring to the table.
It seems obvious, but to maintain sustainable growth, firms need to actively build their business development pipeline. This includes the usual mix of marketing, PR and networking activities as well as being strategic in their approach. This should involve not only targeting the ‘low-hanging fruit’ and quick wins possible in a mid-sized firm through referrals between teams but also looking longer term with a focus on specific sectors. A targeted approach helps bring structure and focus in-line with planning and KPI measurement, all beneficial to the long-term growth of the firm. Hence for example, many Real Estate and Construction Lawyers found themselves at MIPIM in Cannes last month, forging relationships across the property sector.
Whatever sector you work in, there’s no denying that innovation is a method to achieving growth. However, innovation on its own is not a differentiator and it can prove more difficult in a traditional environment such as law. To get around this, some firms are pinpointing specific sectors, positioning themselves as the experts in all things technology, for example. Meanwhile structurally, we’re seeing more innovative approaches to achieve growth. Interestingly, Pinsent Masons launched its flexible legal service, Vario with several other firms, utilising a model of freelance legal professionals. As previously mentioned, there has also been a rise in consultancy-based and fee sharing law firms. From a client perspective, these firms allow for a Partner-led service while as a potential employee, you can benefit from less bureaucracy and focus solely on growing your own client base.
Moving with the times and embracing change is the only way law firms can achieve sustained growth, and that’s whether focussing on their employees, clients or structure.
If your firm is looking to hire new talent to ensure sustainable growth for years to come, contact George Langford about your requirements today. Alternatively, for advice on your own legal career within private practice across London, speak with George on 0203 655 2180 or send him an email to firstname.lastname@example.org.