When America’s businesses went remote in 2020, there was no telling of the long-term effects on the practice of law. But one thing was certain: COVID-19 pushed firms into new, long-overdue technological frontiers. Leadership could no longer ignore the need for digital tools to organise caseloads, communicate internally and with clients and generally keep the lights on.
The following year tossed another curveball: A wave of workplace shifts collectively known as The Great Resignation. In September, 10% of attorneys surveyed by Bloomberg Law were actively seeking another role, and more than half of young lawyers are considering quitting in the next five years.
America’s law firms have admirably risen to these challenges. But Smokeball wanted to hear the full story from their perspective. Our new survey, “Law + The Great Resignation: What’s next for America’s firms?” asked 151 leaders at firms with 30 or fewer people:
- How the pandemic and Great Resignation affected hiring
- What it takes to secure a great candidate in 2022
- Whether remote and hybrid law offices are here to stay
- How the pandemic and Great Resignation affected the day-to-day operations and culture
- How they feel about the future
Here’s what we learned:
Technology helped firms grow in the face of demand
Instead of easing off during an uncertain time, caseloads skyrocketed in 2020 and 2021. Firms in our survey kept billable rates relatively stable even as they increased billable hours. Just 9% say they increased rates significantly, and we suspect the 40% who slightly increased rates did so to offset inflation and cost of living increases.
Law firm growth in the COVID-19 era can’t be attributed to human effort alone. For example, 23% of law firms overall told Smokeball they’ve added new practice areas since 2020. But nearly twice as many firms that incorporated collaboration software — 45% — added a new practice area.
Tech adoption allowed 41% of our surveyed firms to increase their billable hours since 2020. More than 40% of firms that added accounting technology increased billable hours, thanks to tools that allow them to bill more accurately and punctually. Likewise, more than 60% of firms that added client intake software increased billable hours due to reduced onboarding time.
Chart: What new technology did your firm introduce in 2020/21? (Select all that apply)
- Video communication: 61%
- E-signature: 59%
- E-billing: 53%
- Calendaring/docketing: 36%
- Case/matter management: 32%
- Time tracking: 23%
- Document automation/drafting/management: 23%
- Accounting/financial management: 19%
- Client intake/client portal: 19%
- Collaboration, 16%
- Legal practice management software: 15%
- Custom/internally developed software: 13%
- Conflict checking: 10%
- Litigation support: 10%
Chart: What was the impact of that technology on your firm? (Select all that apply.)
- We took on more clients, 49%
- We increased our billable hours: 31%
- We decreased our overall hours worked, 22%
- We hired additional employees: 13%
- We eliminated some open roles: 11%
- We laid off some employees: 4%
Applicants seek a fit that goes beyond pay
Nearly two-thirds (65%) of respondents told us their firms struggled at least somewhat in 2020/21 due to resignations or an inability to hire staff, and more than one-third still struggle today.
Salary will always be the No. 1 reason most people seek a new job. But priorities and lifestyles have shifted in the past two years, and candidates now request a host of intangible benefits from potential employers. Firms in Smokeball’s survey that consistently hire their first-choice applicants say candidates are interested in more than salary.
Instead, applicants want to know about work-life balance, culture, if hybrid is an option and other benefits of the role beyond salary. Half of first-choice new hires (48%) request or negotiate a hybrid work schedule versus 35% of lower-tier candidates. And these first-choice prospects were half as likely to negotiate for a higher salary alone – these candidates wanted a balanced package rather than a pay boost.
CHART: Which of the following benefits have new hires requested or negotiated since the start of the COVID-19 pandemic? (Select all that apply) (Top 5 answers)
- Healthcare benefits: 62%
- Increased salary: 52%
- Hybrid work schedule: 38%
- Full-time remote work: 31%
- Increased PTO: 28%
Under pressure: Employees are likely burned out — but they’re not talking about it
In the face of increased turnover, a tough hiring market and high caseloads, firms are under intense pressure to keep current attorneys and staff. They must respond to the moment and pivot both the way they support their firms as a business AND the way they support their teams.
Participants in our survey were most likely to say employees expect to work from home 1-2 days a week (38%), followed by 2-3 days a week (31%). We expect hybrid models will remain in place so long as current and prospective employees continue to insist on it as a benefit. In fact, 25% of law firms told us they moved to a permanent hybrid model to decrease turnover.
Most firm leaders conveyed they personally experienced burnout during the pandemic — you might be among them. But most leaders also told us less than 10% of their employees reported burnout. (In comparison, 52% of American workers say they experienced burnout in 2021.)
We suspect attorneys and staff simply aren’t comfortable addressing burnout with leadership, a disconnect that must change to avoid turnover and an unhappy culture. Create opportunities for transparent conversation around mental health, and take employee suggestions seriously.
The Bottom Line
Under-30 firms proved incredibly resilient in the past two years. Those who prove successful in the long term will be those who understand that, from now on, change will only move more rapidly. Proactive thinking and a willingness to adapt to modern technologies — especially those that solve multiple problems and streamline workloads — will keep firms ahead.
About the author: Ruchie Chadha is president of Smokeball, a company that offers legal practice management software to small law firms. In her role, she oversees the product, marketing, sales and client teams. Before joining Smokeball, Chadha was a family law attorney serving in the Chicago area. She now focuses her career on delivering innovative solutions to lawyers, so they can better serve their clients and build healthier businesses.