The legal industry saw its share of disruption from the coronavirus pandemic. To survive the downturn, many firms instituted pay cuts, layoffs, and furloughs. After 12 months of making do with less, 2021 may be the year where law firms see more of everything:
Many companies conserved cash and delayed pursuing legal action during the COVID-19 pandemic. As businesses reopen and scale back up, they will call on legal firms to rewrite old contracts and draft new agreements. Litigation and legal work is rapidly increasing in every practice area from insurance to complex commercial matters (and everything in between). When restrictions end and business returns to normal, law firms can expect to see a flood of work in 2021.
More Legal Spending
More legal work and litigation means that spending on outside counsel will likely increase as well. In addition to new cases, companies that have put off legal activities will need to clear their backlog. Some industry experts predict that spending on outside counsel will increase by more than 5 percent in 2021. This spending would be the most significant increase in more than ten years. Some firms in high-demand practice areas have even been able to increase their fees moderately.
More Opportunity for Newer/Smaller Firms
The increase in litigation means that there will be more work for all firms, from the AmLaw100 to solo practitioners. Established firms with name recognition will probably take a larger piece of the pie, but mid-sized firms may have an opportunity to get their foot in the door. Increased litigation across the board will force corporate legal departments to hire firms they’ve never worked with before.
The pandemic also spurred firms to become more open to partnerships and collaborations with other firms. More than half of large firm leaders said they already have or plan to implement new alliances in the coming months.
As work rebounds and the economy returns, there will be greater competition at all levels. The number of legal professionals returning to or entering the job market means that competition among attorneys will heat up:
- The economy added 4,800 legal services jobs in January after months of stagnant growth
- 94% of firms are bringing back furloughed employees or expanding hiring
- Graduating law students will enter the market after a year of delay
At the firm level, expect aggressive competition among law firms. Although there will likely be plenty of work to go around, many firms will grab as much work as possible to ensure survival.
The legal industry is not known for being on the cutting edge of change. The pandemic forced law firms to embrace technology and unconventional approaches much faster than they would under normal circumstances. Now that the genie is out of the bottle, the entire industry has little choice but to continue to become more agile, more technologically adept, and more open to innovation.
The 75 million Baby Boomers approaching retirement will also spur change. This massive demographic shift will impact the legal sector as seasoned attorneys leave or reduce their hours. The younger generation will bring more technology and innovation as they step into vacant leadership positions.
How Collier Legal Search Can Help
Collier Legal Search is a full-service legal staffing company. We place well-credentialed partners, associates, and legal professionals at every level in law firms and corporations. Our experience, connections, and unique approach to building our candidate database deliver consistent results on which our clients can depend. We are committed to the success of our clients and our candidates. Find out what we can do for you. Contact us at 832-239-5253.