With a perfect storm brewing of talent shortages, industry growth and lagging innovation, what can law firms do to retain and attract talent, embrace innovation and get the resources they need only when they need it? Flexible, Scalable, end-to-end outsourced legal support may be the answer.
In 2014, research and consulting firm Gartner identified that businesses need to operate at two speeds to be successful. Speed one or Mode one dealt with the predictable, repeatable knowns. Mode One focused on run-rate activities that "keep the lights on", like administration and maintenance. Mode two was focused on agility, innovation, creativity and strategy. Both modes are critical for successful outcomes; however, most businesses are locked into mode one, where most resources are consumed doing mundane, repeatable tasks.
Law firms may also suffer this two speed or two-mode problem where expensive talent may be wasted on discovery, document review, printing and other tasks. This dichotomy has led to the rise of an outsourced model that delivers the scalability of end-to-end services to take care of mode one with the flexibility, security, and responsiveness to augment legal talent freed up to focus on winning cases.
The growing "war for talent" exacerbates this two speed or "bimodal" legal problem, facing many law firms as they struggle to attract and retain legal and support talent. Compounding the talent challenges is how firms should embrace law tech and innovation, not only in the pursuit of efficiency but to secure the talent they need.
Positive Growth Trends But Concern Over Talent and Resourcing
Findings in the recent Australian Legal Market: Midyear Update 2022 show that positive trends look poised to continue, but law firms' talent remains a significant concern.
According to the Thomson Reuters Institute data, legal departments anticipate their legal spending to increase in nearly every key area. "This potential for continued demand growth could come at a cost for Australian law firms," stated the report. Increased demand for legal services may potentially stress overworked lawyers, forcing many to increase hiring at a greater rate. YTD, the number of fee-earning legal professionals, has already increased by 4.5%.
The talent competition will further tighten as overall demand continues to increase. While higher salaries may be a short-term solution to help recruitment, it has proven to be a relatively weak way to protect against staff turnover; the domino effect is causing concern for law firms for the rest of 2022 and into 2023. Therefore, many law firms are looking at asymmetric solutions to lessen the burden on existing staff and slow the rate of talent acquisition.
Innovation Attracts Talent
In the recent Tech & the Law 2022 report commissioned by Thomson Reuters, VP Carl Olsen shares some sobering insights on the impact that technology and innovation have on "The Great Resignation" and the so-called "war for talent". 50% of private law practices surveyed singled out talent retention and attraction as their firm's biggest challenge.
Taking a more positive view of the talent challenges, 81% of survey responses said that more efficient processes were their most valued way of working. Other insights show that law firm professionals spent between 30 minutes and 3 hours per day on legal research. The research suggests that access to expertise and solution precedents may offer law firms the most significant positive impact, followed by legal research tools. The message was clear that investment in better rather than more technology and access to relevant expertise paid dividends beyond the cost of acquiring them. The time saved and potential impact on retaining and attracting legal talent make these high priorities for law firms in 2022.
Balancing Technology and Resources to Support Talent Retention & Acquisition
As the perfect storm of Covid-19, increased market confidence, remote working, innovation lethargy and the "War for Talent" converge, the demand for outsourced legal support and technology grows. Managed Legal Service Providers are nothing new, and eDiscovery and cloud- based legal applications are nearing maturity. However, a new breed of scalable, end-to-end legal support services provides a promising solution to the intersection of technology and talent. Being able to balance and align resources along the full spectrum of case needs from "file to trial" including expert industry-specific consulting, allows law firms to augment their legal team only with the skills they need freeing up their talent to focus on more essential tasks. Consuming technology in a XaaS Opex model allows firms to try innovative technologies to improve staff efficiency and strengthen the proposition to attract and retain talent. Law In Order has been working at the forefront of this outsourcing model and are the leader in flexible, scalable end-to- end legal outsourcing explicitly designed to address this growing bimodal legal challenge.