The fate of law firms, a crucial referral base for valuation analysts, depends on their ability to recognize that mere growth is not the key to success. This is the conclusion of the “2014 Report on the State of the Legal Market” published by the Center for the Study of the Legal Profession (Georgetown University Law Center) and Thomson Reuters Peer Monitor.
Last year was “another flat year for economic growth in U.S. law firms, with continuing sluggish demand growth, persistent challenges of low productivity, ongoing client pushback on rate increases, and a continuing struggle to maintain discipline on expenses,” the report reveals. Major law firms continue to fixate on expansion as a strategy for success, the report states, but, for most firms, this should not be the dominant law firm strategy. “Far more important is to focus on those factors that can help reshape the firm to be more responsive to the needs of clients, to deliver services in a more efficient and predictable manner, and to develop pricing models that reflect more accurately the value of the services being delivered.”
“Law firms need to think more carefully and systematically about what is necessary to build sustainable organizations over the long term," said Georgetown law professor Mitt Regan, codirector of the Center for the Study of the Legal Profession. "That means giving serious thought to both how they provide services to clients and how they can provide opportunities for lawyers that elicit commitment and afford professional satisfaction.”
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