Law firms are changing. The pandemic has changed just about everything in business, and law firms are no exception. So what are the big changes that law firms and their members are experiencing these days?
The biggest news involves bonuses. The Internet is jumping on an almost daily basis with news of the ongoing bonus war and one more BigLaw firm added to the big bonus list. Even big signing bonuses for associates, sometimes up to six figures.
All of this bonus activity has caused me to wonder what is driving it. After all, the law business has just come through a difficult year where most everyone is working remotely and the brick and mortar offices are sitting empty but very expensive for those firms with long-term leases. On the other hand, most firms are finding that there is no diminution of the quality of the work and profits look good. So it is a bad news, good news analysis.
The answer to this bonus activity appears to lie in the increased lateral movement in large law firms these days. The lateral movement is particularly significant among corporate transactions attorneys, and bonuses are a mechanism that firms use to retain talent and keep clients in place. According to one legal recruiter, “I definitely feel like corporate associate recruiting is the busiest I’ve seen since I’ve started my business.” Another source describes the lateral activity right now as “absolutely absurd.”
So there is that. But it’s hardly a panacea for the increase in mental health issues, stress and burnout in the legal profession during these trying pandemic times. The question will be whether money will solve these problems. My guess is that it will not, but it will keep people in place for the near future and it will be a significant factor in the competition for market leadership.
And there also are other changes in law firms related to the pandemic. With the success of remote practice in terms of law firm profitability and the convenience of working from home for many practicing lawyers, the next challenge I expect is whether the five-day-work-week at the office will survive. According to some sources, law firms are beginning to address the benefits of bringing everyone back to the office full-time. One source reports that offices are being reconfigured with the concept of telecommuting in mind and with a reduction in personal office space in lieu of more collaborative spaces.
And this is likely to create yet another bidding war. One that is about lifestyle not money.
Only time will tell.