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The challenges and priorities of smaller firms in 2023
With plans to introduce more partners into the firm as well as consolidating after a “rapid period” of growth, one managing partner has predicted which priorities will be key for the firm moving into the new year.
Lauren Croft
2023 will be an exciting year for the SME firm after significant growth in 2022 — and in conversation with Lawyers Weekly, Travis Schultz & Partners managing partner Travis Schultz said that ensuring the firm’s sustainability will be most important.
“We will focus resources and energy on providing our team extra support by sharpening our tools when it comes to professional development, precedents and processes. We are very mindful that growth is not just expensive, but distracting — and we want to ensure that we pause to ensure that we continue to deliver on our vision of industry-leading expertise.”
Within the legal industry as a whole, inflation, labour market tightness, and competition remain key challenges for many firms, boutiques and SMEs included.
“The rapidly increasing cost of operating a practice is impacting everyone and that inflation is superimposed on rapid wage growth, across the sector. The highly competitive nature of our profession means that simply passing on increased costs to consumers isn’t always a reality, so firms need to make sensible decisions with their budgets and growth strategies. For smaller firms, there has probably been a bit of an advantage in recent times because they are generally more agile and better able to adapt to rising costs and to recalibrate strategies,” Mr Schultz told Lawyers Weekly.
“On the other hand, when it comes to recruitment, smaller firms who don’t have a genuine point of difference to make them attractive from a candidate’s perspective, have found it difficult to attract and retain — especially when BigLaw is offering very attractive employment arrangements, now that we are at the top of the labour market cycle.”
And having previously spoken about the significant “accidental growth” of the firm, Mr Schultz said managing this growth will remain of high priority moving forward.
“2022 has been a year of many challenges. For us, the biggest issue has been managing astronomical growth. We’ve added 27 people to the team this year, which has almost doubled the size of our workforce in just one year,” he said.
“That has brought the obvious financial and cultural challenges — and that is why we intend to pause a little in 2023 to bed down culture and focus on our people and strategy.”
The legal profession is also more dynamic and competitive than ever, with smaller firms having to continue to compete for both talent and clients.
“The post-COVID practice of law looks very different to what it was five years ago. Whilst there will be many challenges, at least smaller firms have the ability to adapt and pivot quickly when circumstances require it — which gives them a very real advantage over larger corporate structures, which are like oil tankers — they necessarily take a very long time to turn around or alter course,” Mr Schultz noted.
“I expect that for some time yet, smaller firms will continue to struggle with talent retention and recruitment whilst we remain in a very tight phase of the labour market cycle. I do see that easing over the next 12 months, as economic activity unwinds a little.”
Like all firms, Travis Schultz & Partners has had to adapt to a changing environment, post-COVID-19 — a world where greater flexibility is the norm and our clients expect as much, if not more than ever.
“We intend to double down on our strategy, which simply focuses on developing our lawyers to have industry-leading expertise and offering a fair fee structure so that it creates an unmatched value proposition,” he added.
“One of the big challenges for all firms is going to be embedding and sustaining culture when flexible workforces have fewer watercooler conversations, and telecommuting replaces conversations over coffee. But at the end of the day, our profession is blessed to be in good shape, to be maintaining high standards [and] to have an abundance of work.”
Lauren Croft
Lauren is a journalist at Lawyers Weekly and graduated with a Bachelor of Journalism from Macleay College. Prior to joining Lawyers Weekly, she worked as a trade journalist for media and travel industry publications and Travel Weekly. Originally born in England, Lauren enjoys trying new bars and restaurants, attending music festivals and travelling. She is also a keen snowboarder and pre-pandemic, spent a season living in a French ski resort.
