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Top-tiers focusing on ‘future-proofing’
Top-tier firms are more prepared for future changes to the Australian legal industry than mid-tiers, according to a new report.
Grace Ormsby
Commbank’s Legal Market Pulse report looks at the trends shaping the legal services industry in Australia, with the most recent edition highlighting that top-tier firms are focusing on three major areas in order to “future-proof” their businesses, oftentimes against changing client behaviours and competitive pressures.
However, more encouragingly for smaller players, the report did note that “mid-tiers are seeking to increase engagement in almost all areas of future-proofing within the next two years”.
“They expect to match top-tier firms in process and services outsourcing and partnering with start-ups,” the report stated.
Mid-tiers also expect to “exceed them [top-tiers] when it comes to entering new practice areas”.
More generally, a majority of firms “are already expanding into new practice areas”, with 58 per cent of all firms surveyed doing so.
A further 25 per cent of all surveyed firms are expected to follow suit in the next two years, according to responses received in the survey.
Legal Market Pulse looked at 10 different areas for future-proofing, and noted several areas where mid-tiers are keeping pace with their top-tier competitors.
All 41 firms surveyed for the report indicated that they engage in flexible work arrangements, and will continue to do so over the next two years.
“This suggests that talent retention is a priority, particularly given that 88 per cent of firms are also engaging in lateral hiring to grow revenues,” the report stated.
Ninety-four per cent of mid-tiers are engaging with alternative fee arrangements, only just lower than the 100 per cent uptake of such services by top-tiers.
Similarly, 90 per cent of mid-tiers are adopting new technologies, while 84 per cent are using lateral hires as a strategy for future-proofing.
Top-tiers demonstrated 100 per cent engagement across both new technology use and lateral hiring.
Among the firms surveyed, the least used strategy for future-proofing was merging with other firms.
Lawyers Weekly has previously reported on the 2018 year-on-year profit growth reported in Legal Market Pulse across top-tier and mid-tier firms.
