Legal firms, like every business in Ireland, were deeply impacted by COVID-19. Their initial responses to the pandemic included limiting access to premises, reducing staff hours and delaying promotions. Other measures such as deferring partner profit distributions and tightening of discretionary spend on marketing, training and entertainment were common. In some more extreme circumstances, it meant closing offices or letting staff go.
As we move into 2021, with vaccine rollouts underway there is a sense of cautious optimism. No firm would have considered sending all staff home to service clients remotely in pre-pandemic times, yet many law firms are now confident they can deliver a quality virtual experience to their clients. Adding to this, a number of cost savings, including a reduction in overheads like travel costs etc. have been made, and many of these savings will likely continue into the future with the continuation of the virtual working environment in some shape or other.
From our discussions with law firms, there appear to be three key issues to tackle this year:
The shape of the office of the future will be a key issue for all law firms in 2021. Like all businesses, they will be faced with a workforce demanding greater flexibility around time needed in the office. Their response to those requests may ultimately impact a firm’s attractiveness as an employer in the future.
Attraction and retention of key talent continues to be a key issue for law firms. With many new entrants to the market in recent years, some stemming from Brexit, there is increasing wage pressure in the sector.
Although firms are reviewing office space requirements, few have made the bold statements that some tech firms have made in terms of releasing their businesses from the constraints of operating out of a physical space.
COVID-19 has meant that clients of law firms are starting to expect a digital, highly responsive experience. The pandemic has highlighted the need for firms to advance and further invest in technology . It has brought about a realisation that having the right technology infrastructure in place is an essential component of succeeding into the future.
However, deciding which investments to make still poses a challenge for many. HR and client management systems, cloud technology and cyber security investment are all possibilities.
Cash flow management and forecasting are at the forefront of law firm leaders’ minds. While certain costs - like marketing, travel, entertainment, office overheads etc. - will continue to be reduced in the short term at least, most firms carry significant fixed costs.
Now more than ever its key for partners to stay on top of working capital and that a keen eye is being kept on days invested. While cash collection needs to be monitored more closely than ever before.
Remote working will continue to be a key part of how many law firms work in the future. Now is the time to plan what that new normal will look like. What flexibility can you give to staff, and how will that impact on office space requirements?
For clients in some sectors, the pandemic has brought about seismic challenges. It has also brought about opportunities for some. Listening to your clients and staying with them through the journey will help to establish long-lasting relationships.
The pandemic has highlighted strengths and weaknesses in systems. Some law firms have seamlessly transitioned online, while others struggled with hard copy files and inadequate IT systems. Now is the time to regroup, assess your key technology needs and put in place overdue changes.
Ensure that trainees get appropriate development opportunities during the pandemic. Make policy changes now to ensure juniors are routinely included on client calls, part of development bubbles and have regular informal communication before and after virtual meetings.
From the start of the pandemic, there has been a focus on practice management in most law firms. If you can embed that same level of focus via long term processes then this will allow key decision makers to remain agile and maintain clear communication with staff on how the firm is doing.
As COVID-19 continues to rumble on, we are seeing law firms move away from crisis response toward embracing opportunities to change their work practices, upgrade their IT and provide a new value proposition for their people. We are ready to help you as you face the future. Contact us today