This year concludes six years of intellectual capital gathering. Since the survey’s inception, we have seen many trend shifts and new issues gaining prominence that are directly impacting the legal sector, its business drivers and law firm decision making. Nearly 1,400 law firm decision makers and associates participated in this year’s confidential survey – our greatest response rate to date and a testament to the legal sector’s interest in the information we are gathering. Respondents ranged from firms with under 20 attorneys to global mega firms, with the highest rates of response from the Midwest (22%) and Northeast (21%) regions of the United States.
Legal sector change is occurring at lightning speed. Change that used to happen over a decade now transpires in two to three years, and staying ahead of this rapid rate of change is challenging for law firms of all shapes and sizes. Despite the challenges, 2018 marked another positive year for the U.S. legal sector. Gross revenue grew by $7 billion to more than $325 billion by year-end 2018. One-hundred-and-six law firm mergers including 14 global mergers occurred in 2018 with no sign of slowing in 2019.
- Recruitment and retention ranked #1 for the first time as the greatest issue impacting business competition, with competitive fee structures and IT security ranking #2 and #3 respectively
- There was a 7% increase in firms noting diversity demands are impacting business opportunities, and 47% of firms noted that they have a mandate to improve diversity in the next five years
- Associates indicated that to them, compensation is now the most important issue
- Businesses can no longer ignore the staggering millennial influence and are taking the changing desires and priorities of the younger generation into serious consideration
- The average percentage of gross revenue spent on real estate was 5.9%, down from 7% four years ago, indicating that firms are continuing to densify their real estate and decrease per-attorney annual lease costs
- More and more firms are looking closely at and calculating the per-equity-partner costs for bricks and mortar