The American Lawyer reports on several key trends for midsize law firms heading into 2019, according to a recent article featured in Am Law’s latest Mid-Market Report. In the article written by Alan Tarter, he provides his thoughts on industry trends affecting mid-size law firms in the coming year based on his many years of experience as a managing partner and practicing lawyer. These trends include a heightened focus on cybersecurity, continued lateral acquisitions, cost-effective specialization, providing innovative programming to all team members, and greater collaboration between large and small firms.
According to the article, Tarter notes that midsize law firms, like their brethren at large firms, will continue to put an increased focus on mitigation of cyber risk through enhanced security, protocols and more sophisticated risk management. We will see greater use of outside risk management consultants working directly with mid- size firms to address new risks and gaps on coverages. In addition, competition for the best candidates has increased, so midsize firms will need to be even more creative in their offerings. Midsize firms will need to better exploit their value propositions to clients in order to attract laterals from larger firms, Tarter adds.
Tarter notes that an added value proposition of full-service, midsize firms is that they are able to fill in the gaps in the specialized legal needs of both larger firms and smaller firms. According to Tarter, larger clients will continue to gravitate to midsize firms for certain types of work. “Midsize firms are in a unique position to provide more cost-effective, efficient services in matters not requiring large firm infrastructures. For example, midsize firms may be in a better position to provide more cost- effective services in specialized areas such as construction law, office space leasing or IP prosecution where larger teams and multiple offices are typically not necessary. In-house clients are becoming aware of the advantages of using midsize law firms for legal work like this,” explains Tarter.
Tarter adds that midsize firms have a unique opportunity to lead the industry in developing innovative programming to enhance the professional development of employees. These types of programs will help midsize firms stand out from their competitors, and will aid in attracting and retaining employees. These programs should place a greater emphasis on the longer-term professional development of attorneys and other team members. With the goal of providing the most value-driven services to clients, firms of all sizes are also realizing the benefits of partnering with each other, Tarter notes. You will see greater collaboration between large firms and midsize firms in working on projects together where they can each do what they do best and provide better service to clients, (as quoted in The American Lawyer).
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Legal industry professionals say prospects for their future legal business look bright, but cite pricing pressures and cybersecurity as the biggest challenges their firms face, according to a recent survey published on The American Lawyer. The survey, conducted by legal software company Aderant, indicated that law firm professionals have a rosy view of their potential business. More than half of the survey’s respondents—some 57 percent—reported that business was “better” or “much better” at their law firms than it was over the prior year.
Beyond the survey’s findings about law firms’ business optimism, Aderant also asked respondents to name the most significant challenges facing their firms. According to the survey, the top five challenges facing law firms included pricing pressure, cybersecurity, operational efficiency, technology adoption and competition. Among respondents polled from US firms, cybersecurity jumped from sixth place in this survey the previous year to tie for the top spot with pricing in 2018, (as quoted in The American Lawyer).
The survey also included questions about innovation and new technology. While innovation is a hot topic in the legal industry, Aderant reported that more than 70 percent of respondents said their firm does not have anyone on staff specifically dedicated to innovation. But that response changes as law firm size grows, according to the survey. Just shy of 56 percent of respondents from firms with more than 500 lawyers said their firm had a staff member focused on innovation and new technology issues, (as quoted in The American Lawyer).
Contact Bill Sugarman for more information.