Market News

Talent Competition Remains the Top Challenge for Most in Big Law

By Jacob Polacheck for The American Lawyer

The war for talent for both attorneys and staff has never been fiercer, with 60% of respondents in a legal industry survey indicating that recruitment and retention is the single greatest issue related to business competition.

And recruitment and retention was also the top survey response when law firm respondents were asked about the areas that will impact the future of the legal sector, according to this year’s Bright Insight report, Cushman & Wakefield’s benchmark survey of the national legal sector.

When it comes to competition, a majority of respondents (51%) named large firms, both international and national, as their firm’s greatest competition over the last 12 months, followed by medium firms (29%), boutique firms (9%), alternative legal service providers (6%) and house counsel (3%).

Other business challenges for law firms included competitive fee structures (29%), COVID-19 impact (28%), succession planning (22%) and IT security (20%), according to the survey results.

Approximately 200 people took the survey, which ran from the end of January through mid-March. Fifty-four percent of the survey respondents are based at Am Law 100-200 or Global 100 firms, and 46% are solo, regional or national non-ranked firms.

With the effects of the pandemic continuing into 2022, the survey highlighted that 37% expected the office/work environment to normalize back to a pre-pandemic level in the second half of 2022 and 26% expected it to normalize in the first half of 2023.

As the legal industry continues to navigate the landscape of remote work, firms are still in the early stages and “having varying degrees of success, said Margaret Poster, executive managing director of the legal sector advisory group co-lead.

“It’s market-dependent, of actually having people abide by the policies and come to the office when they’re expected to,” she said. “That in and of itself has given law firms pause and the motivation to look very closely at their space and their needs going forward.”

Looking at office arrangements, 61% of survey respondents said they expect it will be common for firms to opt for a workplace design where there are private attorney offices but the offices are not assigned. Only 22% of respondents said that they expect it to be common for firms to opt for an open plan with no private attorney offices.

About two-thirds of survey respondents said they do most of their own work and are constantly seeking cutting-edge technology capabilities, including working more from remote, non-office locations.

“Technology was the great enabler during the pandemic and allowed firms to go remote and to continue to survive and thrive,” said Poster. “Certainly, attorneys have become even more self-sufficient than ever.”

Over 85% of firm respondents reported that COVID-19 had a favorable impact on their firm.

“There’s a welcomed force shift in an industry that was a slow-moving industry — slow to adapt, slow to change, the lawyers just don’t like change like this — but we were seeing, pre-COVID, a lightning pace change primarily driven by technology, client demand, the younger generation doing more of their own work,” said Sherry Cushman, vice chairman and co-lead of Cushman’s legal sector advisory group.

But remote-working technology comes with certain expenses and security concerns. About three-quarters of survey respondents named IT security as an area they expect a greater technology spend in future years, while network/remote working capabilities (54%), knowledge management (45%) and communication/collaboration tools (43%) were listed as the next most selected answers.

According to Poster, COVID allowed firms to speed up the decision-making process with regard to their office space. “It provided the opportunity, the circumstance, that allowed firms to make some of the hard decisions that they knew made business sense,” Poster said.

And since the beginning of the pandemic, firms have learned how to adapt in strategic ways.

“We’re two years in and have definitely seen some fundamental shifts that aren’t just possible trends anymore,” Cushman said. “We’re already seeing firms be very savvy and effect change in ways that we’ve never seen before.”