News of the new Altman Weil survey. Comment here. Summary of key points:
The fifth annual Altman Weil Law Firms in Transition Survey finds law firm leaders are acutely aware of the changes that the profession is facing.
- They are concerned that the demand for legal work is flat or shrinking in many practices.
- They feel real pricing pressure from clients.
- They recognize the competitive forces of commoditization and the emergence of lower-priced, non-traditional service providers.
- They are coming to grips with the idea that aggressive growth in lawyer headcount may no longer make sense.
- They believe that the pace of change is increasing.
Now in its fifth year, the survey shows the ongoing evolution of thinking on many of these issues including some dramatic shifts in opinion since 2009. However, there is less evidence of tangible changes in how law firms operate.
Headcounts and billing rates are still up on average – albeit far less than they would have been pre-recession. Firms use alternative pricing, but in a limited (and usually non-strategic) way. There is some tightening of partnership admission standards at the top of the pyramid, and broader use of contract lawyers at the base.
Most firms appear to be reacting to external forces and making incremental changes within the framework of the existing business model, rather than pursuing opportunities to meaningfully differentiate their firms in the eyes of clients. So far firms are staying ahead of the curve of transition with these tactics — but is this a sustainable long-term course if the forces of change really are accelerating?
Conducted in March and April 2013, the survey polled Managing Partners and Chairs at 791 US law firms with 50 or more lawyers. Completed surveys were received from 238 firms, including 37% of the 250 largest US law firms.
The report includes sections on industry trends, pricing and alternative fee arrangements, economic performance, law firm growth, lawyer staffing levels, succession planning, and the future of the profession.