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Financial Discipline Makes a Difference

The law firm market seems to be improving for 2024.  Growth has overcome stagnant demand.* The pace of expense growth has moderated somewhat.  Raising rates 6.5 -7% at the end of 2023 has helped to increase profitability.  Firms need to see continued improvement in metrics to build confidence further.

 

We Will Discuss Key Drivers of Business in 2024

 

  • The U.S. law firm economy remains strong. However, geopolitical concerns and uncertainty about demand for legal services in 2024 is affecting global firms to a greater extent outside the U.S. Why is New York the hottest place in the U.S. for law firms to grow?

  • The talent war is escalating with larger bonuses, lateral group moves and more non equity partners than ever before.  Because competition is fierce for lateral partners, firms are creating more non-equity partners, and hiring top groups of laterals.  These trends put a spotlight on talent.  U.S. firms raised rates 7% at the end of 2023; and this provides a cushion for lawyers and helps insure retention.

  • “The New Law Firm Look.” Firms are shedding unused space with smaller and fewer offices, more tech and light “  Bloomberg Law 2/27/24

  • Hot practice areas include data protection, AI, cybersecurity, including ransomware, bankruptcy, deals and regulatory practice, with agencies and departments such as SEC, DOJ, FTC, FDA, DHS, DOL are all thriving. 

  • Is the way we work changing?  It’s not about where we work—but, how, when and why we work. 

  • Collaboration.  Work allocation.  Who’s on the team?

  • Short term and long term planning 

  • Firms are using more third party vendors for front office functions such as marketing, business development, collaboration as well as back office functions such as collections, billing, and e-billing.  Third party vendor relationships provide key leverage for firm growth and expansion.

  • What drives client relationships today?

 

The Promise of AI: Its Opportunities, Risks and Challenges

Firms are eager to reap the benefits of AI but wary of the ethical, data privacy and regulatory implications.  Competitive pressure and the tantalizing advances with ChatGPT and other AI platforms appear to be real and immediate.  What are the next steps?  Firms need to set expectations and understand client needs for AI solutions. Legal and ethical risks are considerable.  What are the legal and ethical boundaries?  Many firms have established task forces to look at all the issues.  Initial cost of AI and AI governance within the firm are hotly debated items.

FACULTY:

Aubrey Bishai, Chief Innovation Officer, Vinson & Elkins LLP, New York

Karen L. Braun, Executive Director, Sullivan & Cromwell LLP, New York

Michael Caplan, Chief Operating Officer, Lowenstein Sandler LLP, New York

Anne M. Falvey, Chief Knowledge Officer, Sidley Austin, New York

Avi Gesser, Partner, Co-Chair Data Strategy & Security Group, Debevoise & Plimpton LLP, New York

Clare Hart, Chief Executive Officer, Williams Lea, New York

Conan Hines, Director of Legal Technology, Fried Frank, New York

Anthony A. Licata, Chief Operating Officer, Morgan Lewis & Bockius LLP, Philadelphia

Ilona Logvinova, Managing Counsel, McKinsey Digital, and Head of Innovation for McKinsey Legal, McKinsey & Company, Inc, New York

Keith M. Maziarek, Director of Pricing and Legal Project Management, Katten Muchin Rosenman LLP, Chicago

Glenn G. Patton, Chief Administrative Partner, Alston & Bird, Atlanta

David S. Sanders, Foley & Lardner, Partner, Washington, D.C.

Eric J. Sekler, Chief Operating Officer, Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York

Allan Thompson, Chief Administrative Officer – U.S., Mayer Brown LLP, Chicago

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The Program:

 

1. Economic Signs are Mixed

  • Political upheaval: Impact of politics and world culture on firms

  • Younger lawyers demand firms take positions on social and political change

  • ESG as an example of climate and social change facing clients and firms of all sizes

  • Firms increase rates by 6.5 - 7%

  • Collections

  • E-billing

  • Hot practice areas: regulatory, data protection, cybersecurity, bankruptcy, artificial intelligence.

 

2. Talent

  • Recruiting lateral partners and associates in the race for talent

  • Retention of partners; attrition and retention of associates

  • Where does the talent want to live?  Commuting is not attractive to many partners, associates

  • Compensation and bonuses

  • Work/life balance.  Does it matter?

  • Wellbeing, burnout and other staff issues

  • Client relationships

 

3. Short-term and Long-term Planning

  • Strategic plans

  • Operational plans

  • Budgeting

  • Expense management

  • Staffing plans for associates and partners

  • Are the challenges different for medium and large global and regional firms?

 

4. Real Estate—Does Where We Work Matter?

  • What footprint is best in the agile working environment?

  • Design including more collaborative spaces

  • Remote and home offices; policies, rules and staff issues.  More regional and area offices closer to home provide shorter commutes and may be worth the investment.

  • Making the office a great place to work

 

5. Using Data Analytics and Metrics in Decision Making

  • Work allocation, work assignments, collaboration, teams

  • Front and back office outsourcing

  • Productivity--Is it more or less productive to work from home?

  • Data management and data protection

 

6. AI Risks and Opportunities

  • Decision making using AI data

  • Chat GPT and other AI enhancements.  Where should your firm invest? Who controls AI budget & investment?

  • Predictive analysis and the budget process, attorney and matter budgets

  • New ways for firms to take advantage of AI for research and to improve financial forecasting and increase efficiency

  • Risk analysis; acting on data results

  • Cybersecurity defenses

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*Thomson Reuters The Law Firm Financial Index, 2.12.24

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© 2024 by Sandpiper Partners, LLC​

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