Maintaining a collegial culture is the key advantage that midsize law firms believe they enjoy in recruiting lawyers, according to a study by Georgetown University Law Center.
The study, a collaboration between the law school and law firm referral network TAGLaw, revealed that 70 percent of midsize law firms ranked having a strong culture as the first- or second-best way to woo prospective hires.
"Midsize firms are really seeing that as a competitive advantage—particularly as large firms are having a lot of challenges managing their cultures," said Lisa Rohrer, director of executive education and a research fellow at the Center for the Study of the Legal Profession at Georgetown University Law Center.
The survey results, released on February 19, were provided by leaders at 68 law firms with between three and 500 attorneys. The median size was 40 attorneys. Of those responders, about half were located in North America and one-quarter each in Europe and Latin America.
Culture can mean different things to different firms, Rohrer said. In general, it means the glue that holds a firm together, she said. "It’s how they treat each other, how they think of themselves separately from their own individual books of business."
Among other findings, the firms tended to avoid relying on lateral hires and especially mergers as growth strategies, with 90 percent citing organic growth as a major future revenue driver. Some 57 percent planned to rely on lateral hires; only 19 percent expected to expand through mergers.
That lack of interest in mergers was partly due to a desire to remain independent, with many respondents citing preserving culture as an important reason not to merge.
Asked what measures they had taken since 2007 to improve profitability, 14 percent of the firms with revenue increases of 10 percent or more had done so by freezing or cutting associate pay. Of the firms that had increased revenue by 10 percent or less, 40 percent had frozen or cut associate pay. Ninety-two percent of the firms reported that most of their lateral hires lived up to expectations.
The strategic issues of the greatest concern to the firms was aging or retiring partners, particularly at firms with 10 percent growth or less since 2007. Of those firms, 45 percent reported that issue as the most worrisome.
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