The Key Trends and Realities of Midsize Law Firms

This article was written by Early Stephens, CEO of Actionstep, and was originally published in ILTA’s Quarterly Magazine, Peer to Peer, for its Summer 2023 issue.

While legal industry surveys, trend reports, and technology surveys are plentiful in the large and small law firm space around the globe, there’s a noticeable gap in comparable data when it comes to the midsize law firm market. At Actionstep, we have been partnering with midsize firms on their business and technology needs for decades and wanted to shine a light on their unique experiences.

With that in mind, we partnered with a research firm in the U.S. to unearth and share midsize law firm data. We wanted to capture details on trends and challenges that impact most U.S. midsize firms and better comprehend what keeps these legal professionals up at night. Our 2023 Midsize Law Firm Priorities Report focuses on better understanding the factors that matter most to midsize law firms, including broader business priorities, resource challenges, stress factors, and mental health, as well as overall work satisfaction.

Trends and insights that stood out

  • While almost all legal professionals reported that they enjoy aspects of their work, stress is still an issue. Almost three-quarters (72%) of legal professionals said they have experienced stress, felt burnout, or been overwhelmed by work in the past year. The specific causes of stress among law firm employees vary, but legal professionals in the study cite understaffing or lack of resources (44%) as the top factor contributing to their stress at work in the past year, followed closely by demand or pressure from clients (42%).
  • 92% of law firm professionals are feeling the squeeze from understaffing and under-resourcing. Issues with being understaffed or lacking resources have been particularly difficult for midsize law firms to address during recent tight labor markets. Hiring new employees isn’t always an option, and getting new staff up-to-speed with a firm’s systems and processes can take a long time, leaving other staff to pick up the slack, again contributing to stress.
  • More than half of the participants identified new revenue opportunities as their top business priority. In a tie for second place were managing the cost of doing business and recruiting and retaining talent, which are both essential for growth. Also, recruiting and retention relate to employees who increasingly need to manage multiple roles and various responsibilities while balancing billable requirements with administrative tasks. And, as client service expectations change and become more elevated, it is accelerating the digital transformation that many firms are experiencing.

Also, according to the report findings, legal staff are much more likely to say they are affected by understaffing, lack of resources and demand, or pressure from clients than administrative support roles. Conversely, administrative roles are more likely to say they are stressed by team or firm culture issues, not having clear processes in place to follow, and a lack of support from leadership. Ultimately, these insights can help your firm ensure you’re appropriately addressing the needs of legal and administrative support staff—rather than taking a “one size fits all” approach.

Technology is helping law firms adapt to challenges

Law firms must have an effective way to communicate, store, and share confidential information with clients, and inadequate technology can have a huge impact on the client experience. The survey graph shows how respondents perceive tech’s importance to specific aspects of their work:

It’s clear that tech has an impact on almost every facet of legal work, from profitability to client satisfaction. Law firms’ ability to grow is critical to long-term success, and as the research revealed, technology is a key piece of that puzzle. As the legal industry continues to change and find a new equilibrium, technology should enable firm leaders to innovate and create appropriate business models.

Initial Report feedback and engagement has been phenomenal, sending a clear signal that a data and intelligence gap in the midsize law firm market exists. We look forward to producing the next edition in 2024 and welcome any feedback or new data you’d like to see. Please feel free to reach out.

Written by The Actionstep Team