From strategic growth to AI: Building the blueprint for law firm resilience

April 09, 2024

Law firms have built a reputation for being risk-averse and resistant to change. However, in recent years, the legal industry has gone through a significant paradigm shift that is forcing a new, more resilient approach.

In this year’s first Sandpiper Partners legal roundtable, a continuation of Williams Lea’s highly regarded “The Resilient Law Firm” series, prominent law firm executives and industry leaders, including our CEO Clare Hart, discussed the critical aspects of building firm resilience and adaptability. Topics ranged from short- and long-term strategic planning and talent retention to the adoption of cutting-edge technologies like AI. These topics reflect a blueprint for sustainable growth that can withstand various challenges and market changes.

Here are the key takeaways from the event:

Long-term strategic planning needs to be embedded firm-wide

The age of aggressive and opportunistic expansion is over. Law firms have now entered the era of long-term strategic planning that focuses on deliberate and thoughtful growth, requiring firm leaders to engage in more macro-level conversations and to anticipate the right moves.

“We’ve had this conversation, that opportunistic lateral growth is not the way to go anymore,” said one law firm leader, enumerating the hard questions that need to be asked when creating any strategic plan. “Where do we want to grow? How do we want to grow? Do we still want to be invested in this area? It’s strategic vs opportunistic… Now we’ve started to talk about not investing in places that seem to just move the margins a little bit and take our eye off the more strategic things we want to do.”

In times of economic volatility, with episodic changes and fluctuations occurring more often, a solid, strategic long-term plan will be a law firm’s greatest asset. It’s crucial that everyone within the firm, from executives to staff members, have the discipline to stick to, and execute the plan effectively.

Williams Lea CEO Clare Hart agreed: “No one person has all the answers. When Williams Lea develops and executes our strategy, we make sure we have people from technology, product, sales, marketing, account management – we must take in all their input.” She continued, “We have an executive committee to talk about how we’re doing, and the expectation is, it gets cascaded down to the organization so everyone, across the globe, understands what’s happening. The more we’re sharing, the more people feel included.”

Nurturing the next generation of lawyers and professional staff

Aside from strategic long-term planning, law firms are also recalibrating their talent retention strategies and focusing on the “talent margin” or the value that lawyers, particularly junior associates, bring to the firm’s culture and bottom line. The panelists agreed that it takes more than a big paycheck and generous perks to make this new cohort of young lawyers stay longer at a firm.

“The younger talent wants something different; they don’t necessarily see equity partnership as a realistic option for them. They want a fulfilling, rewarding career, they want to feel connected, like someone’s mentoring them,” said one law firm leader. “We’ve tried to be inclusive, inviting everyone down to the junior level to area conferences. People ask me, ‘Why invite this person who’s just out of law school to a strategic planning retreat, where they almost nothing to contribute?’ But it’s not about what you can get out of them. It’s about cohesion and bringing them together, making them feel like they’re a part of something and getting them in the right mindset.”

This kind of scenario highlights a succession culture, where firms bring in and nurture the next generation of lawyers to help drive strategic planning. It’s crucial to the success of the firm, the lawyers, and, more importantly, the clients.

Younger associates also bring strong technological skills to the table. This expertise proves particularly valuable in areas such as intellectual property, patents, and complex litigation, where such specialized knowledge is becoming increasingly sought after. “They have a technical background and are looking for other [like-minded] people with whom they can work and collaborate – that’s exciting for them,” said another law firm panelist. “They really want to work with senior people, partners and so forth, who understand the technology, so they feel like, ‘okay, I’m being valued for my technical legal skills.’”

Law firms aren’t just struggling to retain lawyers, but also professional staff who are unhappy with the “second-class citizen” treatment. More firms are now recognizing the value they bring and offering opportunities for career growth. Some invite their professional staff to events and activities traditionally reserved for lawyers. One panelist said, “They [professional staff] are included in just about everything I can include them in, because they’re really smart, and they provide skills that we lawyers are not good at. Because of that, they are elevated within our firm.”

AI: Braving the next frontier of legal technology

The legal industry stands poised for AI and automation. With data-heavy workflows, rote tasks, and extensive documentation, law firms provide the ideal environment for the adoption and implementation of these innovative technologies. As firms strive to meet increasingly complex client demands, AI is emerging as a strategic and competitive advantage, offering opportunities to streamline operations, drive efficiencies, and enhance client service delivery.

However, most law firms lack a clear strategy for AI implementation, including foundation building, which includes ensuring the firm’s data is in order. After all, an AI system is only as good as the data it’s built upon.

“You need knowledge and data to be structured and organized for digital transformation, for AI, to take place,” said one panelist. “It’s really about how we collect and direct data, and how we get it ready to use.”

Another critical aspect of AI implementation is identifying the right use cases for your firm. Firm leaders grapple with various challenges, such as unclear business objectives, compliance concerns, resource constraints, ROI measurement, and resistance to change.

Clare advised, “Crawl, walk, run. Don’t try and say, ‘the firm is going to do all of this.’ Work on a couple of manageable projects for certain practice areas. There’s going to be skepticism, and there should be skepticism, but we know it can be done. Get the right people involved, those who have the curiosity and aptitude, pick the topic or area, and make something happen.”

“We have to create communication pathways where we’re not just piloting things and rolling them out, but there is enough education, training and readiness for us and our clients that inevitably enable real use cases,” added another panelist. “Then it becomes a two-way street, where things that we ultimately might focus on may not be things that we [the law firm] made up originally, but came from the client themselves, and that’s a great opportunity for service and collaboration.”

The resilient law firm is one that embraces change and has a clear vision of the future. By investing in the right technology, hiring, and retaining the best talent, and focusing on long-term strategic growth, the resilient law firm can navigate through headwinds better than their competitors.

To learn more about the technology innovations shaping the modern office, download our latest workplace transformation brief, Powering up: Enabling the workplace through technology innovation.