The COVID-19 pandemic has wrought unforeseen changes on many fronts, and law firms will never be the same. During the pandemic, firms have been learning important lessons about how to accommodate—and even thrive with—virtual work, how to reevaluate their legal service delivery and real estate footprint, and how to reallocate tasks to maximize their efficiency.
From HBR’s perspective, the current environment presents law firms with a unique opportunity to accelerate their evolution toward “law firms of the future.” This is the first in a series of blog posts discussing various aspects of that journey: how firms can accommodate new ways of work, improve the efficiency of operations and enhance client service. Future posts will address such topics as broader service delivery, ways of work, collaboration, work from home and real estate optimization.
By dissecting every aspect of firm practices and operations, firm leaders can find opportunities to reorganize, streamline workflows and recover costs. Sixty-two percent of polled participants in a recent HBR roundtable of major law firm operations leaders reported they are already in the process of developing a plan to realign business support and legal services, while the remaining 38% plan to do so. An area ripe for transformation is administrative service delivery, in particular the work traditionally done by administrative assistants.
When and Why
As firms mull over how to move forward, now is the time to re-evaluate the traditional administrative resourcing model and capitalize on the capabilities that new service delivery models, ways of work and technology can create.
- When: now. Firms should tackle this effort now rather than later. First, there is an opportunity to build on the momentum of the past few months and make the most of law firms’ new-found openness to change. Second, firms must make short and long-term decisions about returning to the office, along with related questions of how work is done and the firm’s future real estate footprint. To the extent they were contemplating significant operational, technology and workflow changes, it makes sense to incorporate those changes into the transition plan. To do otherwise would be inefficient and costly.
- Why: improve cost and efficiency, exceed expectations and eliminate silos. Law firms are feeling cost pressures, with COVID-19 adding expense and uncertainty. While most law firms have looked at ways to reduce costs, only a small minority have taken the bold measures to dramatically streamline support in their back-office functions. The work that administrative assistants perform is not optimized for efficiency, there is little visibility into or effective oversight of workloads, and there are few standard processes for delegating tasks.
Changing expectations, both internal and external, are also driving change. Lawyers have increasingly high expectations of their legal support staff, and admins today handle a broad array of activities, including billing, document production, records management, scheduling, concierge-type tasks—and even some client service delivery work. Efficiency dictates that the required work is done by the right resources, as effectively as possible. Law firms’ clients—who have changed their own staffing models—expect their outside counsel to keep pace and may question whether their firms are indirectly passing on the costs of inefficient staffing.
For years, most large law firms have operated on a relationship-based administrative staffing model. While lawyers in many firms initially had dedicated admins, the ratio has stretched over the years from 1:1 to 1:3 and, in some practice groups, 1:8 or more. It is not about ratios, however. Regardless of the exact ratio, this staffing model is flawed because it can create silos and remains inefficient. Additionally, as experienced legal admins retire or leave, their institutional knowledge is lost, and it can be difficult, costly and disruptive for firms to compensate for the knowledge drain.
How and Where
The right model for your firm will depend on several considerations. The goal is to determine, for each administrative task, whether you have the right people in the right place doing the right job at the right cost. This is easier said than done. A firm must gather the data and empirical evidence to understand the current state and determine what changes to make and how.
- How: understand current processes. Understanding the status quo entails a review of workloads, task allocation and productivity, focused initially on admins’ daily work and tasks. But an understanding of what work the admins are doing is only part of the story—it is equally important to understand what work needs to be done. An often-overlooked step is consulting the attorneys and others supported by administrative personnel to understand their service expectations and needs.
Think about who is currently responsible for each of these tasks and processes, as well as whether there is important work that currently may not receive adequate attention and effort. Consider whether the right person is performing those processes and whether there are opportunities to standardize, simplify and automate them, applying technology and intelligent automation.
- How: design your administrative support model. This process will lead to disaggregating the tasks that are performed and evaluating the potential staffing models to identify the right fit for your firm’s ways of work and culture. Some tasks should be reassigned to other groups within the firm. For example, you may find that your admins are spending 30 percent of their time on invoicing and billing at a cost 40 percent higher than your billing staff. Delivery options may include teaming, shared services and third-party staffing, with all offering scale effectiveness and economies.
- Teaming: The structure varies by firm, but with teaming models, a multi-skilled, multi-level administrative team meets myriad support needs. Some teams support an entire office or practice group; others work with a defined group of lawyers; still others may support specific clients or groups of clients. With this model, staff are more focused and collaborative, silos are minimized or eliminated and admins are able to focus on tasks where they excel.
- Centers of excellence (CoE)/shared services centers: Your law firm may decide to disaggregate and centralize certain types of administrative assistant work across the entire firm, such as billing, invoice review or word processing. CoEs can enable the use of best practices and data-fueled insights to drive better service, greater efficiency and cost savings.
- Outsourced work or managed services: Firms may choose to delegate discrete administrative tasks and business processes to third-party providers or may use a managed services provider, combining the benefits of a CoE with advanced technology to improve service and control costs by deploying a cross-functional team that offers solutions designed to meet the firm’s business objectives.
- Where: that depends…Location is a major driver for success, impacting talent availability, collaboration and costs. COVID-19 has added the dimension of remote working. The current work-from-home environment has demonstrated that not all work must be done in a firm’s main offices. CoEs may be located in a lower-cost domestic or overseas market, offering cost structures 30-60% lower. Managed services providers may not need to be onsite. Under all of these options, some work—more than firms imagined—can be performed remotely, with employees working from home some or all of the time. These are important considerations as firms evaluate their return-to-office strategies and future real estate needs.
As with all major changes, your firm should support its decision with a well-structured change management initiative that includes forming a coalition, obtaining leadership buy-in and support and creating communication, transition and training strategies.
HBR can help guide your firm in its journey to become a “law firm of the future.” To discuss your firm’s overall transformation or specific issues such as administrative models, please feel free to contact me.