The future for law firms is one in which those most able to adapt and change will lead the way. Using the results of Curium’s business transformation survey, Kathryn Hobbs considers how change-ready the legal market really is.
“Law firms can succeed if they can do one thing: manage change.” So said Joe Andrew, global chairman at law firm Dentons, at The Lawyer magazine’s annual Business Leadership Summit.
According to The Lawyer: “The law firm of 2025 will not have a particular size, talent make-up or revenue – it will be the best at implementing change.”
Law firms are confronting change on a number of fronts: client expectations and increased competition, with the challenges of managing data and digital change looming large.
Pricing pressures and fixed fees have long become the norm for the legal market. Clients are demanding more value for their money and firms are seeking ways to improve their operational effectiveness.
In September, an ALM Intelligence study warned that law firms should prepare for a “significant increase in competition” as the Big Four accountancy firms take a bigger slice of the legal market.
According to ALM analyst Nicholas Bruch, “Within 10 years, the Big Four could easily become the largest players in the legal industry. Law firms – and alternative service providers – should be preparing for that scenario.”
The report states that the Big Four’s brand strength, client base and ability to offer multidisciplinary services has helped them to take market share from traditional law firms. Deloitte, EY, KPMG and PwC now collectively employ about 8500 lawyers globally.
A LexisNexis report, ‘Amplifying the voice of the client’, concludes that if law firms are to retain their clients, then change is needed; from reassessing working practices and law firm structures, to pricing and relationship management.
Only those firms capable of transforming the way they operate will move ahead of the rest. And firms will only transform if their partners and employees are willing and able to change. All of which begs the question: how good are law firms at implementing change?
According to the results of Curium’s business transformation survey, only 38% of the law firm respondents surveyed think that change initiatives have appropriate sponsors actively involved in their performance.
Just 25% believe that their firm has an effective business transformation team. Almost 90% do not believe that their organisation can communicate change effectively, while only 50% are satisfied that their firm articulate and manage risks and opportunities.
What is common in other sectors is slowly moving into the legal mainstream. At Curium, we are speaking to more and more law firms about how to make change simple and sustainable.
Law firms are also increasing their in-house change capability, with many of the top firms hiring transformation directors, project managers and change professionals.
If success depends on the ability to implement change, then our research suggests that law firms have made a start but still have a challenge on their hands.