Let's talk about 2021

It has always been challenging to adapt to change, even in normal conditions. The one brought by 2020 due to the Covid-19 pandemic is transcendental. We regularly seek the stability or security of the past, but history is memory, we have to accept the present and direct our actions towards our vision of the future.

Some changes were temporary, others were trends, and now they will have lasting effects, as they will mark a new path. The reality is that we spent several months serving clients remotely that resulted in a change in the strategies of many law firms: service strategy, operations, and the way of interacting with each other.

With just a couple of months to 2021, we are concentrating our efforts to create safe work environments while focusing on recovery, stability, and consolidation. We are all seeing signs of recovery and a feeling of relative stability after three months of a significant contraction in the economy. As expected, some experts predict that large corporate clients will seek to reduce costs by restructuring their internal departments. Less workflow to firms is expected. Clients are looking for exceptional services and do not hesitate to express it. Global companies seek comprehensive solutions, so some firms would be seeking geographic expansion to increase market share, others to consolidate strategic alliances. The pressures of the clients to receive more value with lower costs are not new, the plans and the budget for next year must be to continue the reorganization of the operating structures accordingly.

Regarding the budget, the times require using the “zero-based” method, which is to analyze the usefulness of each activity or each item must be justified. Although more time consuming, it is one of the best ways to reduce costs. Regarding the analysis, it is necessary to observe the so-called "RULES" by its acronym in English, which represents Realization, Utilization, Leverage, Expense control, and Speed in billing.

The main challenge in the remaining months of the year continues to be the volatile cash flow. It is crucial to observe it to evaluate how the funds were used in a given period. Decisions to access financing must be carefully weighed.

For years, process improvement was the main concern because with it we gain efficiency and lower the costs. Then we began to lower costs through the outsourcing of legal processes (Legal Process Outsourcing) that include administrative assistance or more broadly the provision of legal services itself. And now, we have Artificial Intelligence.

Technology has been the foundation for business continuity during the lockdown and remains to do so now for remote work. The main concerns are the costs in technology that increase annually and the costs of establishing and maintaining physical, technical, and administrative security according to the standards required, increasingly, by corporate clients who demand security and data protection. And the situation with the COVID-19 and remote work does not help. Cyber-attacks are in the light of day, but so are the audits and due-diligences, so firms that do not adapt, will be excluded from the list of eligible vendors.

Spacious offices from the 80s and 90s were replaced by open spaces to promote collaborative work. The physical spaces were replaced by collaborative virtual ones. In that vein, the time of change is expected to bring returns of rented spaces and restructuring of others. This trend will continue to have a significant impact on the real estate sector in the long term. In recent years, the terms "hoteling" and "hot-desking" have become popular, offices or spaces without a permanent employee assigned to it. One requires a "reservation", just like the hotels (hence the term) and for the other, reservations are not necessary. This could be taken into account in planning, among the options, given the need to lower costs and the density of real estate spaces.

Finding and maintaining talents remains the primary challenge for professional or commercial service companies in all industries. Top talents are expected to decide to move their practice toward stronger or high-potential competitors. In the same order, the largest firms would therefore be in a better position to attract these talents, to merge with smaller firms with specialized practices in services that have been most in demand, but also obtaining, retaining, and training young talents with high potential in future. Digital natives or Generation Z are self-sufficient, self-taught, and highly prepared, but seek flexibility and prefer to work from home. While it is true that current interns of that generation, soon to be young lawyers, can greatly benefit from the experience and knowledge that partners and senior lawyers offer, the keywords for talent retention are leadership, communication, and flexibility.

Under normal circumstances, managing teams is complex. Times of change and partial confinement make career and succession plans difficult. It is crucial to have clear rules, both for incorporation, but also for succession. Managing client relationships and senior leadership commitment to prepare the next generation for the long-term legacy will result in firm success.

New trends will necessarily produce the consequences of legislative initiatives as a process to adapt to changes.

Finally, as a result of the new trends, leadership changes will take place and, the highly competitive environment, as a characteristic of the legal industry, will adopt its more collaborative forms.

Angelina Angelov