Priorities are reflected in the budget. Put another way, people tend to spend the most on what they feel is the most important to them.
Law firms are not immune to this line of thinking. Lawyers’ priorities are set by what will best maximize their individual compensation plans. And the firm as a whole will invest time and effort into those initiatives that are seen as providing the greatest opportunity for future profit.
With this in mind, the results of the 2015 Thomson Reuters’ Peer Monitor Staffing Ratios Survey were intriguing for what the results showed as shifting priorities within law firms.
Perhaps unsurprisingly, support staff levels across all participating firms dropped an average of 2.5% from the previous year. What that means in terms of overall impact is that firms are employing fewer legal secretaries, operations and human resources staff, and technology professionals than in previous years. Some of these losses are due, no doubt, to “right-sizing efforts,” while others more likely reflect an effort on the part of firms to focus their investment on profitable activities while outsourcing other functions as a means of controlling costs.
Hot Topics Gain Investment Dollars
What was more interesting, however, was where firms were choosing to shift that investment. Among firms considered “best in class,” — that is, firms with the lowest staff-per-lawyer ratios — Practice Group operations employment actually grew by 25%, with compensation for those positions growing a whopping 45%. These positions include functions like legal project management, litigation support and other practice support positions.
Legal project management and process improvement remains a hot topic for law firms, and results like this may indicate a long-awaited shift towards prioritizing these efforts among some firms.
Similarly, headcount within recruiting and talent programs at these “best in class firms” grew at a healthy 12%, while compensation for these employees grew an average of 13%. Among AmLaw Second-100 firms, Recruiting and Talent full-time employees (FTEs) grew by a similarly impressive 13%, while Marketing and Business Development FTEs (often associated with lateral hiring efforts as well) among the AmLaw 50 grew at 10% year-over-year.
Managing Partners continue to highlight lateral hiring as a focus area for future growth and profitability, so it is perhaps also unsurprising to see substantial new investment in this area, too. Lawyers are feeling more freedom to switch firms today than at perhaps any point in the past. As firms look to secure the best from among this new pool of talent, it is reasonable to think law firms would need to focus greater investment on those efforts.
Call for New Staffing Survey Participants
Past year participants in the Thomson Reuters’ Peer Monitor Staffing Ratios Survey have included a well-rounded mix of firms from the AmLaw 100, AmLaw 200 and other firms outside of the AmLaw rankings. Peer Monitor would like to express its gratitude once again to all the firms who participated in the 2015 Survey. (No monthly subscription to Peer Monitor is required to participate in the survey.)
Law firms currently have the opportunity to participate in the 2016 Staffing Ratios Survey. Participants receive comparative results to allow actionable decision-making across all major functional areas with individual role breakdowns. Results are broken down on an FTE and cost-per-100-lawyer basis as well as on compensation-per-functional-area basis. Firms can choose which peer groups to compare themselves to and results are provided with mean, median, quartile and best-in-class breakdowns. Law firms wishing to participate can fill out the attached participation form or contact Peer Monitor at peermonitor@thomsonreuters.com.
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