Making predictions for the year is always risky. When we made our predictions for 2020, we never anticipated that we would have the kind of year we’ve just completed. To our credit, we did predict that firms would need to be prepared to manage in headwinds, and that enhancing leadership diversity and reducing bias would be important priorities for law firms. Each of these turned out to be true, although we didn’t imagine the degree to which they would dominate the agenda for firms in a challenging year on so many fronts.
The legal industry has proved remarkably adept at adjusting to the Covid-19 pandemic and the economic shocks it continues to unleash. We’ve seen firms quickly turn themselves into virtual operations, continuing to deliver high quality services to clients both efficiently and profitably, with renewed commitment to health and wellbeing.
At the same time, the crisis has accelerated the macro trends that drive the business agenda of clients, highlighting growth opportunities and areas of risk that must be mitigated to ensure long-term success.
While law firms have long experimented with adjacent businesses, recent industry changes have triggered a new level of investment in and focus on the formation of ‘New Law’ businesses. Given their recent emergence, the term New Law is not yet well defined and the application of New Law models continues to evolve with changes in technology and client demand. Despite this shifting marketplace, New Law offers opportunities for firms and merits more exploration by law firms seeking to differentiate their services, deliver enhanced value to their clients, and establish new sources of revenue.
In recent years, we have worked on a number of law firm mergers where one of the firms was in a significantly weakened position relative to its past. More often than not, these mergers fail to move forward because there is too much uncertainty about the stability of the firm, the deterioration of its financial condition, and the questionable commitment of key partners to remain with the combined firm.
In today’s world, there is no shortage of challenges keeping managing partners awake at night. We see one particular set of challenges receiving insufficient management time and attention in the current environment – talent management. For a variety of reasons, firms simply are not investing the creativity and resources needed to ensure effective talent management in today’s unusual and heavily-virtual law firm environment.