Tuesday, March 25, 2014

ALM Law Firm Support Staffing Report: Optimizing Staff Ratios & Increased Demand for Analytical Skills

ALM Legal Intelligence just released a white paper Finding the Right Balance: Nonattorney Law Firm Staffing Trends. ‘ (Cover title: Law firm staffing—Finding the Optimal Mix. ")   The survey was conducted during January and February 2014. The report studies the ongoing efforts by law firms to "optimize" support staff functions and ratios.

It appears that law firm pulling back from the relentless focus on shrinking staff and management t is now trying to focus on  staff optimization. Optimization includes upgrading functions and identifying the right mix of talents. Providing lawyer with billing support used to mean clerical help. Today billing support requires staff who can provide analytics. Libraries have shifted from managing books to overseeing competitive intelligence and knowledge manageme nt.

Key findings
  • Large law firms spent 16-6% of overall revenue on non attorney staffing. For 3-4 of respondents staffing is the same or  flat for 2014. (51% flat   22% increase). I guess the good news for the market is that only 25% may be reducing staff. 
  • Library services is the most thinly staffed non attorney staff function. 
  • Legal Support, Marketing, Litigation Support and Library Service are still largely staffed with law firm employees. Office services is the function which is most commonly outsourced. 
  • Legal support/secretarial  is the area that experienced the most widespread reduction in 2013. 69% of firms report reductions in this area. 
  • Marketing and Business Development is the area that saw the most increase. 48% of firm report an increase in  full time part time or contact staff over the past 3 years. 23% expect to increase. in 2014.
  • The technological self sufficiency of young lawyers is having an impact on staffing.
  • Legal Support/secretarial is taking on more timekeeping and client support  functions.
  • Libraries are morphing into centers of competitive intelligence and knowledge management.
  • Amlaw ranked law firms spend a lower proportion staff support to revenue 15.3% 
  • Although outsourcing  has  been trending up,  15% of firms reported that they had returned a function in -house after outsourcing. For the vast majority of firms non attorney functions remain firm owned and on site. 
  • Firms need increasingly sophisticated staff. Billing work used to be clerical now it is analytical. 
  • Shift from print to digital resources means library staff must support managing access, passwords training. Everyone can do their own basic research, librarians perform more complex and specialized research.
  • Cost of Marketing is justified by business expansion, protecting competitive advantage, client retention. 
  • Staff morale can be a competitive advantage for the firm.
  • The prospect of layoffs is the number one factor impacting staff morale. 
Optimal staffing  is not low staffing. Optimal staffing allows  a firm to enhance productivity and profits. Sophisticated clients want to know that the firm has sufficient staff to support their work effectively. Law firms are only as good as their people -- and  non-lawyer support staff are important  for successful business management and client support.

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