These Forces Are Transforming the Law Firm Workforce

January 4

There is no denying that the workplace has undergone dramatic changes in recent years. The pandemic turned out to be the catalyst that pushed the momentum of many external developments while simultaneously bringing the internal nuances of the traditional law firm’s work environment to the forefront of the legal workforce’s attention.

Since there is no turning back, law firm leaders must actively identify and respond to these evolving changes in order to survive disruption.  In order to effectively do this, leaders should first have a continuous understanding of the external and internal factors influencing the industry and workforce.

Macro-Level Influences

Macro-level factors such as economic, social, and technological developments are uncontrollable external forces that indirectly impact an organization or business.  

 

As the economy recovers from the impact of the COVID-19 pandemic, the workforce has strengthened. However, with rising costs of living, wages are losing value, leading people to seek higher compensation. The shortage of available workers to fill job openings has empowered workers engaged in salary negotiations.  At the same time, firms face higher operating costs and strained budgets. We see many firms scrambling to reconfigure their financial models to stay competitive in the compensation market to meet the demands of the workforce.

 

We are living in an era of significant social restructuring. Social movements are flowing into the workplace; these movements are no longer “social interest” or “political views” that can simply be barred by the human resources department. Diversity, equity, and inclusion initiatives have become serious priorities in the workplace as employees demand respect for their authentic selves, and companies learn to acknowledge differences and create space for the needs and perspectives everyone brings to the table. While many industries are shifting toward being intentionally active in DEI, many law firms remain unengaged or superficial in creating and supporting such initiatives.

 

As workers seek profound authenticity, they look for work that speaks to who they are and what they care about. Gone are the days when there was a clear social divide between work and personal life. Workers have shifted to viewing and accepting the workplace, where they spend most of their time, as a part of their lives. With that perspective, workers expect the employee experience to be a positive, fulfilling piece of their lives that amalgamates with their other priorities. This expectation of a balanced life transmits to the trending desire for meaningful work and workplace flexibility. In progressive law firms, we see shifting work models that create space for remote and hybrid workers.

 

Technology, coined “the great equalizer,” has become a tool of empowerment for workers. Continuously evolving systems and tools advance productivity and human connectivity and broaden the realm of possibilities for the way we work. As a result, people are increasingly learning how to use technology to find or even create opportunities to earn a living in ways that fulfill their needs for purpose, flexibility, and adequate compensation. 

 

Micro-level Influences 

Internal workplace factors like leadership, administrative matters, workflow processes, technology infrastructure, and interpersonal relations strongly influence the firm's day-to-day operations and the employee experience. These factors are the building blocks of the firm’s culture. When employees enter the workplace, they must be equipped to work in an environment conducive to productivity. 

 

Leadership is the most impactful micro-level influence on people management and firm operations. Knowing how to make good choices and guiding the firm in the right direction is monumental to creating an environment conducive to productivity. In law firms, leadership often consists of founding partners and rainmakers. The traditional function of law firm leaders is to bring in and maintain originations and provide work for lower-level attorneys and staff. As workers seek higher levels of engagement with leadership, the traditional approach to law firm leadership is being pushed for change. Rainmaking is not enough; younger attorneys and staff seek regular communication, mentorship, training, feedback, and support. Firm leaders are expected to come out of their offices and work across the table with their people to share knowledge and foster connection. The modern workforce cares about efficiency, productivity, and consistency, so being left to figure things out with little or no direction from leadership will not suffice.

 

Aside from firm leadership, firm administration directly impacts the day-to-day operation and work environment. Hence, administrative teams play a significant role in creating a productive organization. How they navigate finance, human resource/people management, client intake, external vendors, and general office management determines the firm’s position to function and work to flow. To be competitive, administration teams must stay updated with the latest developments in law firm operations. They should always keep track of the tools and resources available to help make workflows more efficient. 

 

Technological infrastructure is paramount to efficiency and long-term competitiveness. An outdated system creates unnecessary obstacles to getting work done. Investing in robust, accessible networks and advanced practice management software is the way to eliminate waste, simplify tasks and increase productivity.

 

The physical workspace must be appropriate for work. Especially firms that require workers to return to the office should ensure that everyone has adequate space, equipment, and supplies to perform their job functions. The environment should be healthy, safe, and inviting. When assessing the sufficiency of the environment, leaders should consider the physical and psychological aspects of a healthy and safe workspace. The same should be considered for remote work.  Firms providing similarly adequate equipment to ensure an equally productive remote environment will likely see a return on investment from their employees.

 

Interpersonal relationships weigh heavily on the modern workforce. In search of fulfilling work, employees are less inclined to stay with an organization if they experience negative encounters with others in the workplace. Don’t lose talent due to a culture that permits low emotional intelligence, poor communication, and low morale. Firm leaders that both encourage and display equal respect for all employees regardless of title help to promote a positive firm culture.

 

Challenges of Macro and Micro-level Influences on Law Firms

Macro-level influences have set the stage for challenges like quiet quitting, employee poaching, industry hopping, and, thus, high turnover. It has become a vicious cycle that is fueling an industry-wide talent shortage. Many law firms are engaged in aggressive recruiting initiatives and compensation battles for legal talent. With all these dynamics coming into play, it is easy to see how organizations with traditional work models may struggle to keep up with the demands of the modern workforce.

 

As the legal industry has not been proactive on the micro-level to address expectations stemming from economic, social, and technological developments, law firms are now facing growing challenges in managing their workforce successfully. These include lack of collaboration, inefficient processes, limited reporting capabilities, ill-defined firm cultures, and non-competitive compensation models. These challenges have become significant problems in many cases, leading to negative outcomes such as higher turnover, difficulty attracting talent, and reduced productivity.

 

So, what can law firms do to overcome these obstacles and successfully manage their workforce in the long run?

Recognizing that the evolving developments affecting the workplace are only part of the battle, law firm leaders must be open to making changes when change is needed. Then optimize the firm for the future. 

Our next posts will outline specific ways law firms can continue to evolve and prepare the firm to be a high-performance organizations well into the future.

 

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