Uncertain. Unpredictable. Volatile. These words describe the outlook of some law firm leaders since 2020, when the pandemic drove consumer and business digital adoption to advance five years forward in about eight weeks.
Prepared. Predictable. Profitable. That’s the outlook of firm leaders who leaned into the new era of legal innovation. Throughout 2020 and 2021, law firms adopted BI and financial analytics software in record numbers, moreover, the leaders invested in finance automation to provide real-time insights. They gained firm footing in an ever-evolving world, and they earned record profits.
Now, what lies ahead for law firm leaders as they continue to face adaptive challenges? Iridium executives look ahead to the issues that influence how law firms prosper in 2022 and beyond.
Tom Jones, CEO & Founder
Business intelligence platforms become a must have for law firms.
In 2022, business intelligence platforms will be “must haves” not just “nice to haves.” Back in 2020, our clients worried that COVID-19 would drive billable hours down. They tightened control over costs and relied on analytics to improve financial performance. Billable hours and revenue gains grew unexpectedly strong. Law firm profits soared in 2020, lifted by increased cost control and sustained profitability with consistent monitoring.
Law firm leaders entered 2021 with a mission to increase gains throughout the year. Dozens of firms of all sizes signed up with Iridium to get sophisticated yet easy-to-use BI tools that help them target control over financial and performance monitoring.
Firms that invest in end-to-end BI solutions optimize their abilities to: 1) monitor, measure and increase profitability, 2) create more accurate budgets, and 3) calculate more profitable matter pricing. Those tech-enabled firms can expect to win more business at higher margins.
As more law firms embrace BI solutions to improve profitability, firms that go without will struggle with distinct disadvantages—impediments that are next to impossible to overcome without technology.
By the way, I nailed last year’s prediction: Work from home is here to stay. We may not yet work remotely 100% of the time, but the slog of 50-hour, in-office work weeks (and the untold number of commuting hours) have become a thing of the past. We also attend fewer in-person meetings and travel less for conferences and business in general.
Rod Wittenberg, Chief Revenue Officer
Pricing concerns hit an all-time high.
2022 will be a year unlike any other for law firm pricing and project management groups. Clients are pushing law firms to manage matters and stay on budget, which is driving significant demand for experienced pricing and project professionals in North America.
Law firms will continue to strive to deliver high-quality outcomes for clients while sticking to project and pricing commitments. The pricing role is in demand, and firms will likely pay above-market rates to poach seasoned professionals. They’ll even look beyond the legal industry to source top pricing specialists. Pricing leaders in the largest firms will command salaries and compensation packages comparable to other C-level roles.
Jeff Suhr, President, Intellistat/Steere
Finance automation initiatives take a front seat.
As we look to 2022, law firms will continue to execute on their 2021 finance automation initiatives. COVID-19 caused some firms to pause their initiatives in 2020. But now, as firms adapt to disruption, we’re seeing increasing levels of interest in automating the finance function.
As firms roll out new initiatives, they will continue to reap benefits from technology and automation investments made in 2021. Firm leaders will continue to unlock hidden value using digital tools to manage the ever-growing plethora of data that otherwise would remain trapped in core IT systems. They will find additional opportunities to automate manual processes that rely on this data, such as calculating partner compensation, annual financial budgeting and reporting, “push” reporting, and sending timely notifications.
We see a strong trend among our clients to return to the office, but in most cases the need for automation extends outside the office as firms want to make their applications accessible whenever and wherever their legal professionals work. Accordingly, we can also look for a shift to mobile access of financial and performance related data.
Fraser Mayfield, Head of EMEA
Continued consolidation and economies of scale.
We will see continued consolidation in the legal sector in 2022 as firms continue to expand on a global scale. This will increase the pressure to use analytics-driven strategies to expand operations. Leading firms will rely on a variety of data analytics techniques and combine them in different ways to align investments to the most profitable practice areas.
Operating on an increased scale will continue to give rise to new functions designed to take advantage of economies of scale. Professional legal project management will increasingly become the norm for firms that manage complex transactions spanning multiple practice areas. Firms that invest in tools that provide in-depth insight into the firm’s financial position will price and resource the delivery of legal services with confidence.
Every day, hundreds of leaders from law firms like yours rely on Iridium products for strategic clarity. Join us Wednesday, January 12 for a discussion about what Iridium’s leaders anticipate for law firm business intelligence technology in 2022. Sign up now.