June 06, 2023

 Natalie Limerick

flexible resources flexible resourcing law firm strategy Flexible legal staffing

Law firms are not factories, and law firm lawyers are not widgets. But, by borrowing from ‘lean inventory’ principles used by manufacturers, law firm leaders can implement long-term staffing strategies that increase profits and make a firm more competitive.

Lean manufacturing seeks to minimise risks involving inventory. Excess inventory – beyond that necessary to meet demand – wastes resources, as does manufacturing a product before a customer is ready to buy. Moreover, inventory must meet the quality standards that customers demand.

How Most Law Firms Maintain Their ‘Inventory’

In the highly competitive legal services market, a firm’s ‘inventory’ is its lawyers. A firm’s success and longevity hinge on it maintaining its ranks of knowledgeable, skilled practitioners. For decades, firms have done so mainly through the long process of developing legal expertise internally: hiring young lawyers and making a long-term investment in the form of training and assignments that allow a junior lawyer to gain legal skills and knowledge. Slowly but surely, a lawyer becomes capable of handling increasingly sophisticated and challenging matters, enabling the firm to continue delivering the calibre of legal services clients expect and require.

The Perils of ‘Grow Your Own’ Staffing

This staffing strategy is so commonplace that many lawyers do not perceive its risks. First, predicting who will become a good practitioner is difficult. Second, developing lawyers is expensive – not just in terms of salary and benefits, but training, legal education, administrative support, office space, computer equipment, and more – with no guarantee of an adequate return on that investment. Third, it takes years to see if the firm’s investment in a particular lawyer has paid off: not every junior associate becomes a proficient practitioner, and even among those who do, their expertise may become less profitable for the firm, unsustainable (e.g., due to the departure of key partners in a practice group), or strategically irrelevant. In lean manufacturing terms, this approach requires a law firm to retain excess inventory (junior lawyers who need further training and experience) and invest resources in it long before the firm knows whether the inventory will meet quality standards (i.e., proficiency in a given practice) or demand for the ‘finished product’ (an individual lawyer’s legal expertise) will still exist.

A New Era for Flex Staffing Strategies and Five Advantages They Bring

The central flaw of firms’ ‘grow your own’ approach is that it binds developing talent to a firm obtaining expertise. As I explained in an earlier post, the growth in flex legal talent – particularly in mid- to senior-level lawyers – enables law firms to break that bond. Instead of investing the time, money, and resources to nurture talent, a law firm can leverage the investment of others – specifically, the law firms that trained a lawyer who subsequently embarked on a flexible, ‘portfolio’ career.

A law firm that makes flex talent central to its staffing strategy gains five significant long-term advantages:

Lower expenses. Hiring a lawyer as a full-time employee incurs significant expenses before the lawyer generates enough revenue to cover those costs. With interim practitioners, a firm can avoid labour costs until a revenue opportunity materialises. For small and mid-sized law firms without the financial resources or cash flow to maintain a large permanent staff, flex staffing creates new possibilities for meeting client needs.

Reduced risk. Nothing guarantees that hiring permanent employees will work out. Flexible legal resourcing minimises risk in two ways. It allows a law firm to engage a lawyer on a trial basis and assess performance before making a long-term commitment. Moreover, if work for that lawyer unexpectedly dries up, the firm is not stuck paying a salary to a lawyer who no longer generates enough revenue.

Greater efficiency. Flex staffing enables a firm to have its lawyers focus on work with the highest value to clients and the firm. Moreover, since most flex practitioners have experience at multiple law organisations, they often bring a fresh perspective on optimal processes and best practices.

Increased adaptability. Flex staffing enables a firm to quickly adapt to changing market conditions and emergent client needs, thereby minimising the risk of lawyer under-utilisation. Accurately predicting staffing needs years into the future is unnecessary when interim practitioners are readily available on an as-needed basis.

Enhanced competitiveness. Flex staffing enables ‘just-in-time’ access to highlight experienced practitioners with specialised expertise. This enhances law firm competitiveness and increases revenue by enabling a firm to win matters without necessary in-house expertise.

By taking a page from lean manufacturing, law firms that leverage the growing numbers of skilled lawyers choosing flex careers can increase revenue, win new clients, and better compete. Law firm leaders who embrace the use of flex practitioners will help ensure their firm not only survives but thrives.