Law firm leaders and clients meet in London to discuss challenges and opportunities in the changing law firm landscape

October 27, 2022

As the world gradually moves away from pandemic-influenced virtual conferencing, it was exciting to see so many law firm leaders in-person at Sandpiper Partners’ 15^th Annual Global Law Firm Leaders conference. Senior leaders representing top law firms from the US, UK and Europe gathered with their clients to exchange perspectives on weathering the current economic and political storms, agile working and attracting and retaining talent in a constantly changing climate. Rachel McCorry, Williams Lea’s Senior Vice President, Legal Services, EMEA, joined the panelists for an engaging discussion about new ways of working.

Here are the top four takeaways from the event:

Law firm clients seek efficiency first, regardless of economic climate

Efficiency, value, clarity on budgets and forging stronger relationships aren’t new when it comes to client demands on their partner law firms, but in the current climate these things come into sharp focus. A client and outside counsel representative from a global investment bank said when it comes to building relationships, it’s now time for law firms and their clients to go back to basics: “This whole period that we’ve been living through; a pandemic, now we have a war, we have a recession, we have Brexit impacts, we have an energy crisis, we have a very difficult world that we’re now living in. Like any relationship, the relationship between a client and its advisors is a bit of a back-to-basics moment in terms of what makes that relationship flourish. We understand the need for really making sure that a legal team understands the privilege to work closely with clients on their business objectives and finds a way to help achieve them. This is where being close to the clients absolutely resonates.”

Another law firm client from the investment banking sector recognized that in the current environment, their costs are likely to rise, but efficiency remains top priority: “I would expect that going into the type of economic environment we’re heading into, that’s going to generate more legal work. So probably, our legal spend will go up just because that’s the nature of it. What I’m always looking for though, regardless of the cycle, is efficiency. My view is I’ve got to deliver legal services that the bank needs. My responsibility is to deliver those services as efficiently as possible, meaning getting the right level of service, not gold plating it and certainly not under-doing it for the best possible price. I’m always looking to partner with firms to find out how we do this efficiently. How do we work together? How do we talk about what needs to be done, the cost of it and the most efficient way to do it? I want to do that in times of economic prosperity and I’m going to want to do that in times of economic difficulty.”

Challenges remain in the global economy, but opportunities are ahead

Despite the recurring sentiment of economic and political uncertainty, there were mixed views on what lies ahead. Most of the panelists took the view of cautious optimism, “The last two and a half years have been pretty action packed”, said a panelist and managing partner at a global law firm, “But what we’ve seen during that time is resilience and the ability to adapt quickly to new circumstances. Looking ahead, we are cautious about what the future holds, but we’re not seeing the impact now, and we’re trying not to get too ahead of ourselves, given that we are still seeing robust levels of activity across the business. I would say that we’re still very focused on global opportunities, thinking about new markets, but obviously accessing them in different ways, using business models of the future rather than necessarily traditional in office, in location presences”, stated another law firm leader on the panel, “I think that ability to kind of flex out is going to be important.”

Among the optimism, some law firm leaders are seeing opportunities to expand business in ever changing regulatory markets. “I think, certainly from the UK perspective, the impact of Brexit is now starting to be felt”, said a managing partner of a UK based international law firm, “When clients are looking to complete deals or when they’re being investigated, they’ve got more regulators to contend with, and I think that’s replicated across a whole range of regulatory issues. From a client perspective, there’s just more moving parts. From a law firm perspective, you’re just looking at making sure you’ve got the capability to stitch together a more holistic service to help clients manage those different risks. What we’ve seen in the last couple of years is that sort of call to a more sort of national basic approach and I think that’s being replicated across the global economy.”

The only expense that’s really moved the needle for law firms is people

Panelists deliberated the tough conversations they’re currently having on cost management with fellow managing partners in their firms. However, panelists agreed that in the current climate, building robust teams can help weather the storm. “You can look at the costs of property, but the only cost that’s really moved the needle is people. I think that is different to previous downturns, and more acute”, said one of the law firm leaders on the panel, “Partners have to be the ones to be putting pressure on to build more resource because I’ve got plenty of work that needs to be done but I haven’t got the people to do it. We’ve got to build robust, better teams. Now is the time to remember that this is a cyclical business and to communicate to partners that profitability might take a hit in order to weather what is going to be happening”.

One of the resource areas law firms in the US and the UK are focusing is financial support, such as e-billing, to reduce debtor days and bring revenue through the till faster. “Finance has been the busiest area for natural partner hiring”, said a panelist representing a global legal recruitment firm, “We just put together some data and for the last 18 months, hiring in finance has made up 20% of the market, and I’ve never seen it that high. It’s usually much lower.”

More flexibility helps build a more diverse and inclusive workforce

Solving the return to office conundrum remains hugely top of mind across both law firms and their clients, and flexibility seems to be the most popular solution. When the panelists were asked, “If you could wave a magic wand, how many people would be coming into the office?”, the broad answer was that it’s not a one size fits all approach, and depends on the individuals and the roles they do. “I think the one size fits all approach is a misnomer, and until there is alignment in terms of the purpose of the office, I don’t think it will be a clear answer”, said Rachel McCorry.

A speaker and law firm client from a leading global investment bank emphasized that it’s important to start with culture. Having more flexibility can help build a more diverse and inclusive workforce, “You’ve got to now build that culture. Just giving people an edict to come into the office a certain number of days a week is not going to work. We’re trying to build pillars of teamwork, collaboration, DE&I, and encourage engaging with the client. The final pillar is talent development. A lot has to go into building that culture.”

The clients’ comments were backed by some interesting findings, from a panelist and leading consultant, who revealed study results that showed employees who aren’t mandated to come into the office are actually more likely to come into the office, “When we ask most companies, they say that their employees come in to the office for three days a week on average, but what the data actually tells us in terms of occupancy in the office is that most companies are averaging about two days, even with mandates. What the data also tells us is that companies that aren’t doing mandates and are letting team leaders decide for themselves and be clear on where their teams should work are seeing the highest days of office attendance.”

Learn more about finding the right approach to return to office best practices with our latest future of work brief, Mandate or magnetize: Finding the right approach to return to office policies and practices.