Posted in Latest News on 26 Jan 2024
A new year always offers an opportunity for law firms to refocus their priorities, change what they are doing to reflect the current state of the market better, and stay ahead of their competition.
Here at Douglas Scott Legal Recruitment, we are keenly aware of things the market is doing, and a survey from tech firm BigHand has recently been released that shows that firms are looking to boost lawyers’ commercial awareness through training. So, the question remains – do lawyers need commercial awareness training to thrive in an increasingly hard-fought and competitive market?
The number of firms looking to offer this training is 51% - over half of all firms surveyed are looking to boost the commercial awareness of their fee-earners in the next year. The report says, this is being done to address efforts to reduce ‘profit leakage’ (the amount of money a firm has earned but hasn’t collected) and to make firms more sustainable. 64% of these firms were looking to collect and bill fees more frequently, with 31% of people saying they plan to adjust their billing terms. These stats show a conscious shift from firms looking to boost productivity. Of course, the primary drive of a law firm is to make money; making your fee-earners commercially aware helps to do that. According to this report, it seems like this may have been something that has been lacking in recent times: 38% of firms currently provide associates with profit information, and only a slightly higher 39%, provide billing information. This lack of understanding of how a firm operates can significantly impact both fee-earners and the firm itself. It’s imperative to understand a firm’s commercial position within a matter and for associates to be able to converse with their clients on whether their cases represent the best value for money.
All of this follows from the statistic that 59% of firms have seen an increase in the number of write-offs they have had to perform throughout the last year. These write-offs confirm that firms will not get paid for their work, which is a situation no firm wants to be in. This is especially true of firms that have seen this number increase by over 10%. As such, commercial awareness is vital for lawyers to understand. Lawyers need to understand how to be commercially aware, and knowing how a law firm operates is a crucial part of that awareness. Often, however, it’s not about knowledge; it’s a way of thinking: client and marketing events are a vital part of that. Reading around the market is also a crucial part of that: not just around the law and new developments in the legal sector but also in the financial markets. Understanding what the firm needs to be successful and how you can play your part in that process is essential.
Overall, law firms are looking to make their lawyers more commercially aware, allowing them to get ahead of the competition. While the numbers involved in this training might seem a little high, it is clear that firms want to give their staff an edge, which, in this competitive market, is what they need to stand out.