Even amid a pandemic that initially caused law firms to reposition, furlough and lay off their business professionals—as well as an industrywide push toward new technology and automation—don’t expect staff costs to decrease anytime soon.
The intense demand for Big Law services, its ongoing talent war and perpetual drive for efficiency are likely to boost firms’ investment in specialized staff in 2022 and beyond, according to legal profession analysts.
Firms have broadly decreased secretarial support over the years, and an overwhelming majority of firm leaders surveyed by Citi Private Bank’s Law Firm Group said they expect the number of secretaries to continue decreasing. About 83% projected a decrease in legal secretaries in 2022 relative to 2020.
However, roughly two-thirds of those surveyed projected growth in pricing specialists (68%), business development/marketing professionals (65%) and technology staff (63%). They also expected growth in project managers and billing and collections teams.
“Many of these roles are likely to cost more than secretarial staff. This means that even for firms planning to reduce their overall professional staff leverage, they are likely to see an increase in the overall cost of professional staff,” the 2022 Citi Hildebrandt Client Advisory found.
Indeed, much like their attorney counterparts, business-focused pros in Big Law have gained some leverage over management since the pandemic started, and since demand for their services shot through the roof. A recent survey of firm business leaders found “staff poaching” to be the second-largest threat to law firm profitability.
“We’ve had open positions throughout the year on the staff side that’ve been very competitive, and gotten great people as a result,” S. Scott Parel, co-managing partner of Sidley Austin’s office in Dallas, said. “But we’ve certainly seen movement and competition on the staff side. It’s a critical part of the business.”
And while firms have generally been increasing their use of technology—a survey last month of “standout lawyers” across the globe found new investments in tools to automate and improve efficiency should be the top priority for firms in terms of tech investments—those investments can create new opportunities for skilled professionals.
Dan Tacone, president and chief client officer of legal tech provider Intapp, told Law.com last month that such investments require firms to find professionals who can specialize in certain functions, like managing client relationships, or a certain practice area.
“They’re going to have to be more tech savvy because this age of automation, digitization and AI is offering job opportunities that are different than today. But it gives them avenues for career and economic advancement,” Tacone said.
Indeed, according to the latest Peer Monitor Index report, an overall increase in law firm overhead was driven primarily by knowledge management and technology expenses, and support staff compensation.
Kristin Stark, a principal at Fairfax Associates, also said the demand for talented C-suite pros is “very high” because law firms have become more business-minded and strategic.
That’s not to say no professionals have been displaced due to technological advances. Eric Schurke, CEO of Moneypenny, which provides telephone answering and digital chat services to law firms and other clients that can be automated or run by the company’s employees, said demand for his company’s chat service is up 500% since the start of the pandemic.
Schurke said one of his clients, a “decent-sized” firm in Atlanta, told him it recently lost two senior professionals to another firm that was willing to pay them more. But in general, it’s the smaller firms and smaller businesses more broadly that are getting squeezed, he said.
“You take a senior person that’s doing so much—it’s nearly impossible to try and replace them,” Schurke said. The understaffing puts pressure on firms, he said. “They’re suffering too, which means they’re increasing their outsourcing to us.”