LSAG Legal Briefs - Vol 2

Issues Impacting Business Competition Challenges related to recruitment and retention have been growing at a faster pace over the past five years in comparison to other issues. This shift is believed to have occurred due to the continued growth of millennial lawyers ages 23 to 38, attorneys retiring or leaving for in-house counsel positions, and attorneys being terminated due to underperformance. In addition, the younger generation of attorneys has a different set of priorities than the older generation, which is directly impacting their decision making when faced with selecting a firm to join and remain with for the long term. Fixed-Fee Structures In order to mitigate fixed-fee structures, the number one action firms across the U.S. are taking is to “closely evaluate operations and streamline services rendered” (53%). To find ways that allow firms to provide more services with less cost and time, many are expanding their use of technology, training, and overall business protocols to provide improved efficiencies that are directly improving profits and offsetting fixed-fee structure demands. This year we also saw an increase in firms that have developed or retained a “committee or fee coordinator” to assist in developing improved pricing models and fee structures.

CURRENT ISSUES RELATED TO BUSINESS COMPETITION: RESPONDENTS CHOSE MULTIPLE OPTIONS

10% 9% 8% 2%

Debt

Non-Labor Overhead too High

Globalization

For the first time, recruitment and retention took the #1 spot

Real Estate Issue

12% 11%

Internal Consensus

Other

14%

Conflicts

20%

Labor Overhead too High

26%

IT Security

54%

Competitive Fee Structures

63%

Recruitment & Retention

The top three efforts firms have taken to improve business synergies between partners are: 1 A continued focus on “social events to bring attorneys together to collaborate” (up from 59% to 63%) 2 Increasing business development monthly meetings (54%) 3 Off-site retreats to focus on business development (45%)

(15 of which were cross border), 2018 was even more active with 106 law firm mergers (14 of which were cross border). Firms continue to expand business strategies for growth by increasing lawyer number one action to maintain or increase profits. Second in ranking to increase profits is for firms to “remain stable and build business from within,” primarily by increasing business from existing clients and improving cross selling within the firm. In addition, there was an increase of firms that are downsizing headcounts through careful staff/attorney evaluations. headcounts and/or opening additional locations as their

Firm Expansion & Strategies to Increase Profits

With 2017 being the most active year for law firm mergers in more than a decade with 102 mergers

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