The legal profession has been built upon traditions that are steep in the principals of precedent. In the Oxford University press, they state there are “four issues {that} guide precedent: predictability, reliability, efficiency and equality”.
Not only have these same four issues been integral to law by providing consistency to the law, but law firms themselves have used these issues of precedent to construct their practice, including operations, culture, technology, etc.
However, when one leans to heavily on the four issues of precedent for their practice itself, it can become a hinderance to both growth and profitability, especially when weighed against the need for innovation and adaptation.
For instance, law firms have known to be laggards with respect to the adoption and the implementation of new technology. A study by Wolters Kluwer, shows firms who set the precedent of digital transformation, have a higher firm profitability, 62% of the time, YOY. Those who trail with this precedent show a profitability of 17% of the time, YOY.
The same survey indicated that 43% of legal firms cited organizational issues (including culture that fears change) as the reason new technology is resisted. The survey also indicates that less than 30% of the attorneys believe their law firm is prepared for the technology related changes needed to meet client needs.
COVID’s Impact on Precedent for today’s law firm:
Though the pandemic was enough of a disruption in and of itself, the legal profession had to come to grips with a new precedent ushered in by COVID that altered the traditional law firm’s landscape.
COVID forced many firms, or at least accelerated, the firms need to implement and enhance their digital technology stack, including but not limited to, communication and collaboration systems, remote-login and remote support tools, as well as the security posture of the firm(s),as attorneys and staff moved to a remote work environment.
Unexpectedly, yet in a very positive way, this new precedent of remote work brought to life a hope, that had almost all but vanished for many lawyers, a work life balance. Even with all the added stress of families being sequestered because of Covid, many attorneys found they were happier and healthier working from home.
By not having to commute back and forth to the office nor having to travel to meet clients, lawyers found time to exercise, work on family tasks, take care of children, pets, and even implement a healthier diet.
Attorneys were not only happier and healthier, but they were in many instances more productive. Because they were able to have more control over their schedule, billable activity increased in some cases as much as 3 hours per day.
With flexible work here to stay, another precedent taking shape is the reduction and reallocating of office space. “Offices once showed the strength and reputation of a firm, now they are seen as an unduly costs to the client”, says Cushman. Cushman also indicates the office footprint for law firms will reduce by 10% to 30%. The immediate results will increase the profitability of the law firm and should allow them to be more aggressive and competitive with their pricing strategies.
Another long-standing precedent to the success and profitability for law firms has been and continues to be, their reputation (brand)!It is often here, that the firm retains and attracts the best talent. To market your brand effectively in today’s ever-changing employee landscape, it is imperative you set the proper precedent.
By moving away from the traditional in-office model to a more flexible work environment, has opened up the opportunity for firms to increase their talent pool exponentially by garnering their talent from a global vantage.
Research by Pew Research and We Forum, shows Millennials and Gen Zers, will comprise 62% of that work force by 2025.
It is important to set the proper precedent to meet the expectations of both Millennial’s and Gen Zers. They will expect their law firm to provide flexible work. Research shows, those who do not provide this environment, will lose them to competitors who do.
Millennial’s and Gen Zers will research the culture of your firm, both internally and externally. They will review your position and implementation with things such as the importance and priority on mentoring, to help with their growth and productivity, importance of diversification and inclusion(D&I) within the firm, along with external activities, including civic and social engagement, the environment, and economic climate.
Diversification and inclusion (D&I)is of great importance in attracting Millennials and Gen Zers to your law firm. Firms will need to set the precedent in how they actively engage in implementing D&I into their practice. Over 72% of Millennials believe an organization is more innovative when it has a culture of inclusion, and 83% of Gen Zers feel diversity and inclusion are important when choosing an employer.
D&I brings multiple benefits to a firm, including larger talent pool, better decision making, enhanced performance, new and innovative perspective, and more employee engagement and trust. An article published by Network for Business Sustainability, reports the benefits in productivity with a diverse team, “companies benefit most when upper management and lower management are both racially diverse, the researchers found. A 1% increase in racial diversity similarity between upper and lower management increases firm productivity between $729 to $1,590 per employee per year.” D&I cannot be a written policy only, it must be shown by the culture of the practice itself.
Precedent helps instill principals and pace that others follow! Will you be the leader?
