A New Study Highlighting Pressures on Small Law Firms
Study Reveals Increasing Pressures on Small-Medium Law Firms
· 36% of practitioners spend 10 hours a week on non-fee earning work
· Just 22% of small firms have dedicated business development staff
· New business leads not being converted because of time restraints
· Social media causes information-overload
A new study by legal and tax publisher, Thomson Reuters, has revealed just how competitive the commercial landscape is for small-medium law firms*, as they balance fee-earning work with the pressures of running their business, and struggle again fiercer competition and increasing client demands.
More than 200** senior legal practitioners were questioned in research in June 2012 commissioned to help Thomson Reuters understand exactly how its WESTLAW AU online research portal, can help drive efficiencies amongst the professional services.
The study examined the time pressures facing firms as they split their limited resources between non-fee earning roles such as IT, HR, marketing, business development and research. A sizeable 36% of practitioners admit spending up to 10 hours a week managing these responsibilities, while 14% spend up to three days a week (up to 24 hours) on these roles.
Professionals also admitted that the legal landscape in Australia is more competitive than it’s ever been before (61%), with clients spending less money (57%), the need to do more work to service clients (44%), multiple pitches before a client reaches a decision (37%) and more firms involved in the pitch process (29%).
However, despite this tough climate, just 22% of firms had a dedicated person managing business development, compared with IT departments (80%), finance (63%), HR (35%), marketing (28%), and research (26%). Instead, Firm’s preferred to let fee earners solely shoulder this responsibility. Compare this with large Firms**, 86% of which have a dedicated business development team.
It appears these time pressures could be taking their toll, as the majority (67%) admitted that the challenge of balancing fee earning work with business development was the key reason for not converting leads, followed by difficulty in achieving standout compared with competitors (10%) and too much competition in the market (7%). Practitioners also admitted that their business development efforts had increased significantly compared with two years ago.
The role of social media also came under the spotlight, and rather than saving time, the vast majority of people (83%) admitted there was often or sometimes too much information to keep up with. A further 28% say it takes up too much of their time and 22% suffer from information overload. And while the majority of law firms (55%) say they now spend more time consuming media than they used to, there emerged a general lack of trust (46%) to ‘citizen journalism’. Despite this, 16% say social media sources always plays a role in their research and 45% say it often does.
Rick Ness, Chief Technology Officer of Thomson Reuters Legal, Tax & Accounting ANZ, comments: “There’s no doubt about it – the legal market in Australia is more competitive than ever before. This is especially pertinent for the small-medium firm which has limited resources and budget, meaning they are more stretched than ever, especially when it comes to balancing fee-earning work with the multitude of other demands on their time, from new business to research.
“One solution is to look how technology can play a role in helping you to work smarter and drive efficiencies, such as using news aggregators or online research methods, but without falling prey to the information overload phenomenon that can be common among those using online sources to research.”
*Study questioned 201 senior staff/partners across law firms of 1-10 fee earners in Australia.
** Large Firms are classified as having 20+ fee earners
Thomson Reuters is the world's leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial, legal, tax and accounting, healthcare and science and media markets, powered by the world's most trusted news organization. With headquarters in New York and major operations in London and Eagan, Minnesota, Thomson Reuters employs more than 55,000 people and operates in over 100 countries. For more information, go to www.thomsonreuters.com.
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|Peter. Thanks for posting this. This matches my understandings of pressures in the small firm space.|
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