Motus Recruitment Insights

The start of a new year is a time to look forward and consider what lies ahead for law firms over the next 12 months.

So, we’ve been speaking to a number of law firm leaders to hear directly from them their thoughts on the issues they and their businesses face as we move into 2024. 

Clearly all law firms face a range of challenges, but in our discussions the three most talked about issues were:

1. Maintaining & Increasing Profitability

Whether a national law firm, a regional heavyweight, a smaller independent or a boutique, maintaining and increasing profitability will be high on the agenda. 

It’s been well documented that law firms have had to contend with increased salary, property, and other overhead costs over the last 12 to 18 months and as a result, law firm results for 2022/23 typically showed an increase in turnover yet reduced profitability. 

Moving into 2024, there is concern that next year’s results could, for several firms, see this gap widen even further. To avoid this, many law firms will be looking to further lower costs in 2024 by finding ways to be more efficient, to work smarter and to reduce unnecessary spend.

Interestingly, a surprising number of law firms felt they were still trying to find the right balance between levels of productivity and how much time they expected staff to be working in the office or at home. 

Where and how much to invest over the medium/ longer-term is an on-going conundrum for all businesses. For a lot of firms though, they are increasingly worried about whether or not to invest in and adopt the use of Artificial Intelligence.

2. Retention & Recruitment

Recruitment and retention remain a key focus for law firms, and all signs point to this being an on-going challenge throughout 2024. Many firms will be seeking to grow market share, strengthen teams, expand geographically and add complimentary skills to their teams.

Such hiring, especially at partner level, takes a significant amount of time, money and resource. The opportunity cost involved means that firms are acutely conscious of not appointing the wrong person. 

With this in mind, firms are indicating that they will increasingly be more considered and robust in terms of their recruitment processes and applicant screening next year.

Although salary growth is not expected to be as high as in the last 12 months, candidate expectations are still not fully aligned with this slowdown. 

For firms who cannot compete on salary alone, more than ever before they will be looking at other ways to both retain existing talent and also to attract and secure new talent. As one senior HR Director stated “We’re really cranking up around culture, purpose and flexibility”.

3. Culture and Cohesiveness

Those firms who have grown significantly in recent years recognise that part of their challenge will be to simply ‘keep all the balls in the air’ as the business becomes more complex with lots of competing demands. In many ways it’s going to be about ensuring that internal communication, leadership and staff engagement are further strengthened.

We are aware of some firms who will be taking a fundamental look at their management structure and corporate governance to make sure they are fit for purpose to drive growth over the coming years.

The outlook – rain or sunshine?

Without doubt there will be challenges ahead, including others we haven’t covered. However, what was most revealing from our discussions with law firm leaders was that there was little or no talk of ‘doom or gloom’ nor any significant concern of ‘falling off a cliff’.

What came through loud and clear was that everyone we spoke to was quietly optimistic about 2024. Bring it on.