The attorney serves as a mediator in the evolving landscape of legal management, as highlighted in the report “2021 – The State of the Global Legal Market” produced by the Center on Ethics and Legal Profession of Georgetown University Law Center and Thomson Reuters.
We outline our perspectives on the key patterns impacting legal administration in 2020 and the primary concerns that are expected to shape the market in 2021 and beyond.
Data from this report, sourced from Peer Monitor®1 and Acritas, entities under Thomson Reuters, is derived from the findings shared by 162 law firms in the United States.
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The pivotal moment in legal administration
2020 presented unprecedented challenges for aspiring lawyers due to the impact of a worldwide pandemic, economic turmoil, and political instability in Brazil and other regions.
Law firms faced significant disruptions in their operations in the past year and had to rapidly adjust to market changes. The successful adaptation to these challenges by most offices is a testament to the creativity of their leaders and the future of the legal industry.
Uncertainties versus Insights – lessons gained
There is ongoing uncertainty regarding how long pandemic-related disruptions will last and when companies can resume normal operations. Additionally, there are uncertainties and speculations about what normal operations will entail in a post-pandemic world.
2020 marked a significant shift in the restructuring of legal service delivery on a larger scope.
Customers’ roles and expectations are being altered.
Fluctuations in the fees charged by attorneys.
– In the expansion of competition, which includes non-conventional law firms.
In the realm of technological advancement.
These developments in the market are driving the efficiency, predictability, and cost-effectiveness of service provision and legal management, which in turn is advancing technology in legal offices for the future. Understanding and implementing these trends can be beneficial for the legal market in 2021.
The market’s robustness and the legal field’s prospects
Many companies have embraced innovation to adapt to market demands, but others have not due to resistance from some lawyers who are hesitant to explore new legal management strategies for various reasons.
The COVID-19 pandemic worsened and sped up these trends, potentially weakening resistance to major changes and leading to increased pressure for significant redesign in legal management systems, including law firms.
Law firms’ performance in 2020
The legal services industry showed positive growth over the course of ten years, with law firms able to sustain profitability levels enabling them to stay competitive.
- Increases in your fees that are noticeable and significant.
- Decrease in capital partners and rise in professionals receiving fees.
- Aggressive management of expenses.
The strategies mentioned resulted in strong financial results across the market in 2018, 2019, and the initial two months of 2020… It was in March when we began facing challenges.
The daily average demand closely matched the previous two years’ averages in January and February, but started to diverge significantly in March, impacting all law firm practices except bankruptcy and reorganizations.
Market innovation: Comparison between liberals and statesmen
On a global scale, we observe a ceasefire in the ongoing conflict between politicians and liberals regarding the government’s involvement in economic affairs, with a general consensus that the State should play an active role in economic recovery.
More than half of the companies, including a majority of small businesses and almost half of large businesses, sought and obtained government financial assistance in 2020 through loans from the U.S. Small Business Administration Payroll Protection Program under the CARES Law, as reported by Thomson Reuters Law Firm Business Leaders Report.
Capital Partners – Business Investment Firm
The actions implemented by companies in 2020, along with considerable cost savings due to office closures and other operational restrictions, resulted in a substantial increase in profits for stakeholders, despite the challenging and uncertain year.
All market segments have shown a notable rise in achieving equal profits among PPEP capital partners (Profits Per Equity Partner) in 2019, with a strong likelihood of all sectors concluding the year with a PPEP increase exceeding 10%.
The lawyer who maintains equilibrium
In 2020, legal management faced challenges but managed to adapt and navigate through the difficulties with the help of resilient lawyers and technology in the workplace.
Thomson Reuters created a report titled “2021: The State of the Global Legal Market” for understanding the legal market landscape and making informed decisions. Download it to stay informed.