Pitcher Partners on Wednesday released results of our 2015 Legal Practices Survey. Maintenance and growing profits continues to be very challenging. Concerns of respondents include:
- Difficulty in maintaining and growing profitable revenue
- Retaining quality staff / generational change
- Client fee expectations and pricing
- Technology changes
- Succession of practices
Further, our survey found:
- 21% of practices don’t set an annual budget and 28% do not actively review write-off, making strategic planning and timely decision making extremely difficult.
- Succession is a major issue, with 48% of practices having an average equity partner age over 51 but only 34% of practices having documented succession plans.
- Outsourcing is becoming more popular, with 24% of practices outsourcing some component of client work or administrative tasks, but those who have not considered it yet have no plans to in the future – potentially widening the gap between innovative firms and the rest.
The survey supports practitioner concerns of slowing revenue growth. Pitcher Partners’ Executive Director – Private Business and Individuals, Ashley Davidson, believes this can affect profitability and require smarter thinking about staff utilisation and digital strategy.
“Digital strategy isn’t just about having a pretty website, it’s about developing ways to work, collaborate and manage your office more efficiently,” said Ashley Davidson.
“If you feel you physically have to be sitting in the same room together, you have to question whether you really have your digital strategy right.
“The legal sector, and professional services more generally, is moving away from a culture of ‘presenteeism’. But it’s incumbent on us to grow up and become more results-focused, instead of measuring staff utilisation by how many hours a day they spend at their desks.”
Ashley Davidson also outlined that growth in revenue generation will be an ongoing challenge for many.
“Firms focusing on core strengths and niche services at value driven prices will continue to prosper, along with those who clearly understand the origins of new work and can effectively price each engagement.
“Our survey showed that there is a trend away from pricing by billable hours, with practices reporting an increase in fixed fee or value-based fee structures.
“This is a very client-focused approach – clients value quality and efficiency of service, and firms that can demonstrate that will survive and grow into the future.”
For further information please contact:
Ashley Davidson, Partner/Executive Director, 03 8610 5327
Sabine Wolff, Media and Communications Advisor, 0419 529 577