Unlike available time, there seems to be no shortage of legal industry studies and surveys. We find keeping tabs on external sources of data to be a useful mental, for understanding the market and trends, as benchmarks against our own research, or ferreting out new ideas and pursuits.
In the course of such reviews, providing summaries of these studies here on the Business of Law Blog seems to be public service of sorts legal community enjoys. There’s a long list of such summaries to be found under the tag – legal industry study – and includes a mix of data we’ve generated or reviewed from third parties.
Here is our most recent edition with summaries for six recent law firm studies:
1. IT as a Law Firm Asset or Expense?
Thirty-nine percent of law firms see IT as an expense according to the 2015 ILTA Tech Survey, which drew responses from 420 firms. That’s down five percentage points from the same survey a year earlier.
Meanwhile, thirty-three percent see IT as an asset, 14% say IT is “revenue-neutral” and 12% say legal IT contributes to the top line.
It’s a step in the right direction according to InsideLegal which said, “there’s a positive correlation between firm size and management’s view of the IT function; the larger the firm, the more prevalent the perception of IT as strategic and revenue-focused.”
Cybersecurity remains a key concern expressed by respondents reported Legaltech News. ALM’s Zach Warren noted many law firms were “beefing up their cybersecurity presence” and implementing data encryption for both hardware and systems.
More recently we’ve seen why – alongside a prediction Lee Rosen made in 2014. Today he recommends getting rid of the servers and moving to the cloud.
“As IT departments work to meet client demands on security, there may be some increased understanding that we are here to make our firms competitive, bolster revenue growth and keep clients assured that we deserve their business,” according to the 269 page report.
Other nuggets from the survey include:
- On average, 44% of attorneys use laptops or notebooks over desktop computers
- 67% of attorneys work in a “matter-centric interface” vs. an “application-centric desktop”
- 53% of law firms are standardized on the Microsoft® Internet Explorer® (v11) browser
- 95% of firms do not provide payment options besides traditional bank checks and credit cards
The most cited tool for contact management (32%) was the Microsoft® Outlook® application Our own LexisNexis® Interaction® edged up to 28% from 27% last year and 24% three years ago. The InterAction® for Microsoft® Outlook® plugin “provides direct access to vital client data, including, contact information, mutual connections, upcoming meetings and personal notes – all while you’re inside Microsoft Outlook email, calendars and contact lists.”
2. Hot Practice Areas and Legal Jobs
Robert Denny recently published the 27th edition of a communique called What’s Hot and What’s Not in the Legal Profession. In it he assesses law firm practice areas of opportunity, emerging jobs in the legal market and trends in the industry.
For this particular report, he wrote in a piece for Attorney at Work, “has been the most difficult of all to write because of the volume of continuous, sometimes conflicting, changes affecting the legal profession — which many firms still have not recognized or accepted.” Still he and his team powered through and here’s a glimpse at some of the assessments:
Aside from cybersecurity and regulatory practice areas, which Mr. Denny say are “white hot,” other practice areas include: white-collar crime, labor and employment, M&A and elder care. In addition, elder care, he wrote, “continues to grow because people need to make changes in their estate plans due to living longer.
In terms of jobs, pricing directors “continue to be hot in AmLaw 200 firms,” while marketing technology specialist is emerging among the same category of firms. Other areas he includes on the list are roles for responsive web design and client interviews. Who precisely is best suited to conduct client interviews he says is a matter of debate and dependent on law firm objectives.
“If it is to cement client relationships, the managing partner is usually the best person — if properly prepared. To obtain feedback on client service and quality of work, the relationship/responsible partner is usually the best. For meaningful information for market analysis and strategic planning, the CMO or a third party is best.”
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9 Neatly Organized LexisNexis Reports and Studies from 2015
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3. Law Firm Collaboration and Cross-serving
“People largely agree that management supports collaborative efforts,” according to a survey of 200 readers conducted by law firm economics consulting group, Adam Smith, Esq. However “when it comes to collaborating on cross-serve opportunities at law firms; when we get into the necessary components of collaboration things begin to fall off the rails.”
For example, among “all lawyers” surveyed, less than half (41%) agreed or strongly agreed that their firm has good coordination between practice areas. However, when the answers are segmented the responses were quite different. Of those in management positions, 56% believed their firm had strong practice area coordination while of those in business positions, just 23% thought this was true.
Self-ratings for strong coordination between offices were even lower for “all lawyers” (36%) and management (39%) but slightly higher among business professionals (30%).
“Perhaps most damning is what appears to be a significant lack of trust within law firms,” wrote Janet Stanton, a partner with the consultancy who conducted the survey. “You’ll note that none of these are even passing grades.”
The survey highlights challenges with cross-serving plans, goals, follow-up and pursuit incentives. When asked if “incentives to pursue cross opportunities are commensurate with the effort required” less than half of any segment surveyed agreed or strongly agreed:
- All lawyers – 30%
- Management – 39%
- Business professionals – 23%
- > 500 lawyer firms – 21%
- < 100 lawyer firms – 53%
The challenges appear well-defined, so “why don’t more firms more aggressively or more systematically pursue this?”
“My hypothesis is that lawyers are educated and trained to value the really hard, arcane, unobvious stuff,” writes Ms. Stanton. “Business, frankly isn’t all that poetic.”
“We think smart firms bring in accomplished business people to complement those practicing law,” she concludes.
4. Law Firm M&A Aimed at Opening New Markets
“We recently took a look at the strategy behind the mergers completed by AmLaw 100 firms between 2011 and 2014. Our analysis indicated that 41 percent of those mergers were driven by geographic expansion, with firms entering new markets or significantly increasing their presence in an existing market. A number of the new market expansions were driven by cross border mergers.”
The largest deal involved 425 lawyers between “between Locke Lord and Edwards Wildman Palmer” the Global Legal Post reported, but Ms. Smith is careful to point out smaller firms are also making more deals:
“In 2015 we saw a bit of an uptick in mergers where the smaller firm had more than 100 lawyers, up to 5 through the 3rd quarter with at least one more in the 4th quarter.”
Late last year, consulting firm Altman Weil, Inc. analyzed the record pace noting that acquiring a boutique law firm was a faster way to grow a practice area or develop a presence in a new market than lateral hiring. The firm keeps a running tab of law firm M&A deals on its website.
Also see: UTBMS: A Breakthrough for M&A Codes
5. Automation Limitation? Humanize Legal Service
A young programmer in the UK reportedly developed a bot – a computer program – that “has successfully appealed $3 million worth of tickets.” What’s more? It’s free to use.
Surely this is a sign of the times – that robots are about to replace lawyers – right?
Not so fast, according to a widely reported academic research paper titled – Can Robots Be Lawyers? Computers, Lawyers, and the Practice of Law:
“While computer systems are replacing some in the legal workforce, automated systems are also shedding light on what lawyers do that computers can’t — with unintended outcomes for old-fashioned human attorneys, both good and bad,” according to Andrew Strickler, reporting for Law360.
Professor Dana Remus of the UNC School of Law and Professor (Emeritus) Frank Levy of MIT combined “a detailed technical analysis with a unique data set on time allocation in large law firms” and “estimate that automation has an impact on the demand for lawyers’ time that while measureable, is far less significant than popular accounts suggest.”
In the conclusion, the paper references several examples, including:
- “Counseling. The tax software can predict how the IRS will act, but it cannot and will not counsel the taxpayer on how to proceed, including on the value of compliance and the possibility of an alternative course of action.”
- “Respect for clients’ interests. The software objectifies a user172 by assuming that the objective of all users is to use any asset-sheltering trust arrangement for which the projected savings outweigh the risk of detection.”
Also see: The 4 Pillars of Legal Innovation
6. Location, Millennials and Law Firm Offices
The big city may have all of the lights, but it’s the borders that have a growing allure. “Many law firms are being more creative than before and even locating themselves on the edges of traditional city locations as a means to keep costs down, but also to be able to develop for future demand,” according to the Global Legal Post, citing a study by commercial real estate broker JLL Brokerage, Inc.
“Live-work-play environments appeal to Millennials, and the lower rents in fringe locations appeal to efficiency-focused firms,” says Elizabeth Cooper, international director for the firm in the article.
Have you spotted a survey or study that merits consideration? Feel free to leave us a note in the comments or tweet us a link: @business_of_law.
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