Law firm study: With size, comes growth

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Edward Poll
BridgeTower Media Newswires

A legal newspaper recently asked its readers to respond to a series of questions. Admittedly, the survey was neither scientific nor large. But the answers did portray an interesting picture of its respondents.
The essence of the survey was to test the confidence level of lawyers based on size of firm. Respondents were asked whether they were likely to hire in the next three months, whether their billable hours would grow, whether their physical facilities would expand, whether they would increase their investment in technology or marketing, and whether they had confidence in the strength of the legal economy.

On average, the study showed that the larger the firm, the more positive the response.

Little expansion seen


At firms of all sizes, however, expansion of facilities received the least enthusiasm. I suspect that the rationale here was that advancing technology permits more productivity with less space and fewer people.
And each responding group indicated they expected to increase technology and marketing efforts in the future. Of course, staying current with modern technology is now a requirement under the Rules of Professional Conduct, whether implicit or explicit.

Who will new hires be?


In larger firms, in addition to expanding technology, there is a higher likelihood of hiring, though there is no indication of whether the new hires will be lawyers or paralegals.

The expectation from my experience is that the new hires will be paralegals, who will be paid at a lower rate and whose work will be supervised by lawyers already in the firm.

This, coupled with increased technology, will permit greater productivity at a lower cost than in the past.

The net result will be more rapid and efficient completion of work, thus encouraging the legal product to be produced at a lower cost.

Billable hours also on rise

The larger firms’ responses also suggest a rise in billable hours, along with new hires. This needs to be reviewed in greater detail in future surveys.

“Billable hours” generally means number of hours multiplied by an hourly rate. However, the billable hour is more likely to be abandoned by the smaller law firm in order to remain competitive.

Value, irrespective of billable hour, is more likely to be asserted by the smaller firm. And in such circumstances, the growth of the number of hours may not register in a survey like this one.

The consumer of legal services will be more concerned about the result and total cost. The lawyer will be concerned about conveying his or her position in the legal market as a marketing effort to gather clients — and profiting from that position.

It also will require an increased flow of communication between lawyer and client to be sure the lawyer provides what the client wants (as opposed to what the lawyer thinks the client needs) in a timely and cost-conscious manner.

Further study needed

This survey produced interesting responses and a variety of possible conclusions. Certainly, the overall result of this survey is to encourage follow up surveys of a similar nature. I eagerly await the results of the next survey.

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Edward Poll is the principal of LawBiz Management. He coaches lawyers and is the creator of “Life After Law,” a program that helps attorneys plan for profitable exits. He can be contacted at edpoll@lawbiz.com.

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