Lack of Urgency in Firms’ Support Structures Risks Profitability

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Lack of Urgency in Firms’ Support Structures Risks Profitability

By BigHand.

For the last two years BigHand has been reporting about the pressure on legal support resources and its latest report has uncovered a number of trends, including staff attrition and recruitment challenges, plus a lack of effective and profitable task delegation, which are dovetailing to create an unprecedented challenge.

During May 2022, BigHand gathered a total of 836 responses across senior Operations, HR, Support Staff Management and Practice Group Leader roles, from firms of 50+ lawyers in North America (NA) and the UK, taking a deep dive into support staff structures and market trends to understand how to create a relevant, efficient and client-centric working environment.

The survey found that, without structural change, underpinned by powerful workflow technology and meaningful data, law firms face a difficult future. If support services are not improved, firms will risk wasting time and expensive resources, affecting profitability, efficiency, staff morale and ultimately client satisfaction.

Key findings include:

– 75% of NA, 68% of UK firms say increased resignations and churn in the last year has affected support services staffing,

– 58% of NA, 56% of UK are making recruitment decisions based on anecdotal evidence that more support is required,

– For 81% of NA and 78% of UK respondents, delegation of tasks suited for home and office working remains a manual process.

Attrition & Recruitment Risk

Law firms have been aware for years of the fast-developing problem created by the retirement of highly experienced support staff. However, the problem is getting worse. Almost two thirds (64%) of NA and (61%) of UK respondents are expecting to turnover >60% of their support staff in the next 5 years due to retirement and attrition rates. Of these, over a third (39%) of NA and (32%) UK are expecting to lose >80%.

This is compounded by the array of choices and employment opportunities open to support staff, -which is affecting the majority of law firms. 75% of NA and 68% of UK confirm increased resignation and churn in the last year has affected support staffing.

Despite this 58% of NA and 56% of UK respondents say they only use anecdotal evidence that more support is required to make recruitment decisions. As a result, firms are taking the obvious approach, with 47% of NA and 52% of UK firms automatically replacing staff like-for-like, despite ranking this 7 out of 10 or greater in difficulty to achieve.

Firms need to better understand what skills are required and move away from blindly replacing like-for-like. To future proof service delivery, firms need to identify current and emerging skills gaps and put in place robust plans for attracting, retaining and upskilling to safeguard productivity.

Focus on Profitability

In an era of escalating legal costs, it is no surprise that client pressure for more transparency is also growing. 71% of NA, 63% of UK say they have received pressure from clients to make sure legal work is completed by the most cost-effective resource available. At the same time, support team costs have risen over the past 12 months, according to 69% of NA, 61% of UK. Both trends are coming together to encourage firms to place a higher priority on delegating work to the most cost-effective resource (42% of NA, 43% of UK).

However, in many cases this is simply not happening. Not only do processes remain inefficient – 81% of NA, 78% of UK firms are still manually delegating tasks to support staff working in the office and support staff working from home – and 43% of NA and 37% of UK admit that lawyers are doing more administrative work themselves rather than trying to navigate how to get admin work to the right support resources.

Lawyers don’t want to spend time figuring out how to get work to a competent, properly skilled support team member. Firms want lawyers to prioritize billable hours and profit. This is an expensive and untenable stand-off.

Data-led Processes

The implications of these challenges on firm operations are obvious: lawyers’ time is being wasted; support staff expertise is not being correctly or efficiently utilized; client expectations are not being met; and, critically, profitability risk being compromised. If firms are to achieve a productive, service delivery model, change is required. Firms need to introduce the right structures, processes and hybrid working policies that truly reflect the needs of a diverse working population and support an efficient, cost-effective operation.

Briana McCrory, CMO, BigHand, concludes: ‘BigHand is committed to providing value-added research to both our customers and the wider legal industry to help them understand and address today’s challenges. This latest research demonstrates the vital need for law firm management, HR Directors and Support Services Managers to work together to create a robust support service strategy.

‘It also highlights the fact that, with structural change, underpinned by powerful workflow technology and meaningful data, law firms will be able make the cultural and operational transition to client-centric delivery, to stand the best chance of retaining valuable staff and, critically, achieve profit expectations.’

To find out more or access the full report, click here.

[ Artificial Lawyer is proud to bring you this sponsored article by BigHand. ]