law firm management

Actionstep Survey: 2025 Roadmap for Australian Midsize Law Firms: Priorities, Challenges & Opportunities

As we navigate 2025, Australian midsize law firms find themselves at a pivotal crossroads—balancing client expectations, talent retention and the promise (and pitfalls) of technology. The recently released 2025 Australian Midsize Law Firm Priorities Report by Actionstep offers a deep dive into what’s shaping the future for these firms.

Here’s s summary of what you need to know from the Report—and how your firm can stay ahead.

🎯 Client Satisfaction: The Cornerstone of Growth

It’s clear—client satisfaction is king.
71% of midsize firms rank it as their top priority for protecting and growing revenue. But it’s not just about delivering legal outcomes; it’s about building trust-based relationships, offering personalised service and consistently exceeding expectations.

Interestingly, firms are focusing more on deepening relationships with existing clients rather than chasing new business. In fact, 37% see expanding existing client accounts as their primary growth strategy for 2025.

✅ Takeaway: If your firm isn’t investing in client experience, you’re leaving growth on the table.

👥 Talent Retention: Your Secret Weapon

While technology grabs headlines, midsize firms know that people drive performance.

  • 59% of firms highlight attracting and retaining talent as a top strategic priority.
  • Engaging work, leadership and firm culture outrank pay as key reasons employees stay.

However, when employees consider leaving, pay and remuneration become the decisive factor. This signals a clear message: while meaningful work keeps people engaged, competitive compensation keeps them committed.

✅ Takeaway: Create a workplace where talent thrives—offer challenging work, clear career paths and ensure your pay structures remain competitive.

💻 Technology & Automation: The Untapped Advantage

Despite recognising efficiency challenges, midsize firms remain cautious adopters of automation and AI:

  • Only 38% are actively using automation tools.
  • Just 5% have reached AI maturity.
  • Cybersecurity concerns and data privacy remain top barriers.

There’s also a noticeable gap in digital client experience. While firms excel in personalised, human-centric service, only 41% feel confident in their digital touchpoints like client portals and automated communications.

✅ Takeaway: Embrace technology—not to replace people, but to empower them. Automation can reduce workloads, freeing your team to focus on high-value client interactions.

🔐 Cybersecurity: More Than Just IT’s Problem

With client trust on the line, cybersecurity is non-negotiable. Yet, the biggest risk isn’t technology—it’s human error. Over 63% of firms cite staff behaviour (think password sharing, weak authentication practices) as their top vulnerability.

✅ Takeaway: Build a security-first culture. Regular training, robust protocols, and smart tools like multi-factor authentication are essential to protect both your firm and your clients.

🏆 5 Strategies for Midsize Law Firm Success in 2025

  1. Acknowledge Tech Scepticism: Start small, demonstrate wins, and build confidence in automation.
  2. Prioritise Efficiency: Use automation to tackle time constraints and free up your team for strategic work.
  3. Enhance the Client Experience: Leverage digital tools to complement your personal service.
  4. Strengthen Cybersecurity: Focus on both technology and employee awareness.
  5. Put People First: Foster engaging work environments and ensure competitive compensation.

Final Thoughts

2025 presents both challenges and opportunities for Australia’s midsize law firms. Those that blend human expertise with smart technology, prioritise client relationships, and invest in their people will be best positioned to thrive in an increasingly competitive market.

Is your firm ready to seize the moment?

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The Future of Legal Services: Key Takeaways from the IBA’s 2024 Report

The legal profession is no stranger to disruption, but the pace and complexity of change facing the sector today are unprecedented. The International Bar Association’s (IBA) 2024 White Paper on the Future of Legal Services offers an essential pulse-check on the challenges—and opportunities—facing lawyers, law firms and legal institutions globally.

Based on a wide-reaching survey of legal professionals from around the world, this Report uncovers where the industry is heading and how well it’s preparing for the journey.

Here’s a summary of what you need to know in the Report:

🔍 The Purpose Behind the Report

The IBA’s Future of Legal Services Commission was established to analyse how the legal profession is evolving. Through its annual survey, it aims to identify priority challenges, assess sector readiness and provide guidance for law firms, legal service providers, and policymakers.

The 2024 report doubled its response rate compared to 2023, reflecting growing engagement from professionals across continents.

⚙️ Four Pillars, 17 Challenges

The report structures its analysis around four core themes:

  • People
  • Clients
  • Business
  • Rule of Law

Within these themes lie 17 specific challenges—from the rise of artificial intelligence (AI) and ESG expectations to mental health, diversity and the integrity of justice systems.

📈 Key Insights from the 2024 Survey

1. AI Is the Game-Changer (But Readiness Is Lacking)

AI remains the most talked-about disruptor—and for good reason. The report identifies AI-related challenges (like training, integration and client expectations) as the top medium-term risk for the legal sector. Yet, despite this recognition, organizational readiness is still low. AI is too often treated as a future problem, delaying much-needed action today.

Top AI concern: Change management and training—not just tech implementation.

2. Mental Health Is a Rising Priority—Especially for Younger Lawyers

Mental health and wellbeing continue to gain attention. The survey reveals a generational divide: under-45s see it as the most pressing challenge over the next five years, while over-45s don’t place it as highly. Regardless, readiness remains lacking.

Key takeaway: Law firms must invest in mental health support now to retain top talent.

3. Talent and Profitability Remain Front and Center

The profession is feeling more confident about its ability to attract and retain talent—though it’s still a high-impact concern. Financial performance and profitability, meanwhile, have emerged as the number one short-term challenge, reflecting heightened economic pressures.

4. ESG & DE&I: Slipping Down the Agenda?

While ESG issues received less attention than in 2023, connected themes like diversity, equity and inclusion (DE&I) and climate impact are still gaining ground outside of the USA.

Firms appear better prepared than before, but the recent shift in focus in the USA raises questions about long-term ESG strategy.

5. Rule of Law: Still Overlooked

Challenges like access to justice and the independence of the profession have seen a drop in perceived impact—possibly because they lack a clear “owner” within organizations. However, political uncertainty (e.g., elections, legislative changes) is now drawing more attention due to its direct commercial relevance.

📊 Where Should the Sector Focus Now?

According to the Report, the following areas deserve immediate strategic attention:

  • AI Readiness: Training, change management, and ethical integration.
  • Mental Health: Especially as a generational priority.
  • Sustained DE&I Efforts: Despite ESG fatigue, diversity remains a long-term imperative.
  • Climate and Justice System Impact: Low on the radar now but rising fast.

🧭 The Bottom Line

The legal sector is at a crossroads. AI is reshaping the delivery of services, talent dynamics are shifting and clients are demanding more socially responsible practices. While the profession shows resilience and growing awareness, gaps between awareness and readiness remain significant.

The IBA’s White Paper offers a roadmap—not just for what’s changing, but for how to respond. The challenge for firms and legal institutions now is clear: prioritize smarter, act sooner, and build the capacity to adapt faster.

Want to dive deeper into the report? You can find the full 2024 White Paper on the International Bar Association’s website: www.ibanet.org

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Insights from the 2025 EY Law General Counsel Study: 60% plan to increase ALSP usage in the next year

The recently published 2025 EY Law General Counsel Study reveals how corporate in-house legal departments are responding to major external disruptions—ranging from geopolitical instability and regulatory complexity to technological transformation—to drive confident innovation.

While these trends demand agility and modernisation in legal operations and risk management, internal barriers like budget limitations and resistance to change often slow progress.

📊 Key Findings

1. 🌐 Legal Teams Face Rising External Pressures

In-house legal departments identify three major disruptors shaping their strategies:

  • 🌍 Geopolitical uncertainty (76%)
  • 📜 Complex regulatory environments (75%)
  • 💡 Rapid technology evolution (74%)

These factors are pushing legal teams to rethink their approaches to compliance, governance and operational efficiency.

2. 📉 Internal Budget Pressures Persist Despite Growth Expectations

  • 📈 83% of legal departments expect budget increases in 2025.
  • However, 87% cite cost control as a top priority 💰
  • 61% point to limited budgets as a significant hurdle in optimizing legal sourcing strategies 💼

🚀 Strategic Recommendations

1. 🧠 Gain Deeper Operational Insights

Engaging stakeholders and assessing operational maturity enhances planning and execution. Yet only 11% of departments conducted stakeholder interviews last year—an untapped opportunity.

2. 💵 Optimize Legal Spend and Increase Transparency

With only 24% completing recent spend assessments, legal departments should:

  • 🔍 Analyze spend in detail
  • 💳 Consider chargebacks
  • 📊 Improve transparency and financial oversight

3. 🤝 Embrace a Diversified Legal Sourcing Model

To increase agility and expertise:

  • Legal teams are tapping into Alternative Legal Service Providers (ALSPs) ⚖️
  • 60% plan to increase ALSP usage in the next year ⏩

4. 🧑‍🏫 Invest in Legal Talent Development

With 64% prioritizing upskilling and reskilling, focus areas include:

  • 🌱 Employee well-being
  • 🧭 Career development
  • 🎯 Talent retention

5. 📏 Align Risk Management Across the Enterprise

Fewer than 50% have a clearly defined risk governance model:

  • 🤝 Cross-functional collaboration is essential
  • ⚠️ Clear standards and risk tolerance must be established

6. 🤖 Leverage Legal Technology and Emerging Tools

While 75% aim to refine their legal tech strategies, only 25% prioritize Generative AI (GenAI):

  • 📈 Opportunity to automate tasks like contract review and compliance
  • 🧩 Build a tech roadmap that aligns with business goals

🏁 Conclusion

The 2025 EY Law General Counsel Study highlights the urgency for legal departments to adapt amid growing complexity.

By embracing innovation in sourcing, talent, tech, and governance, legal teams can build more agile, efficient, and future-proof operations.

Report: Clio’s 2025 Legal Trends Report For Mid-Sized Law Firms

Clio’s 2025 Legal Trends Report for Mid-Sized Law Firms provides a comprehensive look at how mid-sized law firms in the US are adapting to industry changes; particularly as it relates to AI adoption, billing models, client acquisition, and technology investments.

Although the results are based on data from US-based firms, the results are arguably applicable here in Australia and more broadly so here’s a summary of the key takeaways:

🚀 AI Adoption & Transformation

  • Mid-sized firms (20+ employees) are now leading AI adoption in legal tech, surpassing smaller firms.
  • 93% of surveyed professionals in these firms use AI, with 51% using it widely or universally.
  • Common AI tools include legal research platforms, document automation, eDiscovery, and predictive legal analytics.
  • AI is viewed as a way to increase efficiency, reduce costs, and improve client engagement.

💰 Billing Models & Pricing Trends

  • Flat fees are now the most common billing method among mid-sized firms, outpacing hourly rates.
  • Firms are shifting away from hourly billing due to AI’s impact on time-based work and client preference for predictable pricing.
  • Subscription models are also gaining traction, especially for ongoing legal services to business clients.
  • Despite the shift, hourly billing remains prevalent, particularly with highly varied rates by role and experience.

📈 Client Acquisition & Marketing Strategies

  • Mid-sized firms use multiple marketing channels: websites, SEO consultants, social media, online reviews, and referrals.
  • They’re less reliant on referrals than smaller firms, but invest more in digital marketing.
  • Tools like e-signatures, intake forms, and online scheduling directly improve conversion rates and revenue (up to 20% higher).
  • Chatbots are underused despite 51% of clients finding them helpful—a missed opportunity.

💸 Spending & Technology Investments

  • Staff salaries dominate expenses (41%), followed by rent, marketing, and office costs.
  • Mid-sized firms spend less on office expenses (5%) than solo and smaller firms, due to economies of scale and flexible work arrangements.
  • Spending on software and professional fees is rising rapidly—showing a strong focus on tech and professional development.

☁️ Cloud Technology Adoption

  • Mid-sized firms lag behind smaller firms in cloud adoption (only 38% vs. 71%).
  • Firms with 20–49 employees are more likely to use cloud tools than larger mid-sized firms.
  • Hesitation around switching legacy systems or internal decision-making bottlenecks may be holding back adoption.

🧭 Strategic Takeaways

  • Mid-sized firms embracing AI + modern billing models + tech investments are poised to outpace competitors.
  • The real threat isn’t automation—it’s firms that adapt faster.
  • Cloud-based tools, client intake tech, and AI are critical for efficiency, growth, and client satisfaction.

You can download the full report here.

Get in touch if you want to discuss the outcomes of this Report or need assistance with your strategy.

📩 richard@gsjconsulting.com.au

Key Takeaways from the 2025 Law Society Financial Benchmarking Survey

The latest Law Society (England and Wales) Financial Benchmarking Survey has sparked significant discussion on social media today. The findings highlight some critical financial challenges for mid-sized law firms, particularly in terms of profitability, chargeable hours and cash flow management.

📊 Top 3 Key Findings:

1️⃣ Fee Earners’ Costs vs. Fees Charged

  • The median hourly cost of a fee earner (based on 1,100 chargeable hours) was £123.40, while the median hourly fees per fee earner stood at £133.01.
  • 🔴 93% of fees earned are being used to cover costs, leaving minimal margin for profitability.

2️⃣ Shortfall in Chargeable Hours

  • The average recorded chargeable hours per fee earner increased slightly to 773 hours (up from 765 in 2023).
  • ⚠️ However, this is still well below the 1,100-hour target—a shortfall of over 300 hours per year per lawyer.

3️⃣ Increase in Lock-Up Days

  • Year-end lock-up days (including work in progress and debtors) rose from 143 to 146 days.
  • This trend indicates longer cash flow cycles, which can put pressure on a firm’s financial stability.

🚨 What Should Law Firms Do?

These figures underscore the urgent need for better financial planning, sustainable profitability strategies, and operational efficiency. Some key focus areas include:

✔️ Improving revenue streams—exploring retainer-based models for better income predictability.
✔️ Enhancing productivity—have a robust and actionable business development plan for all lawyers!
✔️ Optimise cash flow—reduce lock-up days by streamlining billing and collections processes.

🔗 Full Report: Read the Law Society Financial Benchmarking Survey 2025

📢 Looking to bridge the 300+ hour gap per lawyer? Or interested in strategies for growing a profitable legal practice sustainably? Let’s talk! Get in touch today.

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richard@gsjconsulting.com.au

Billable Hours Per Week at Mid-Sized Law Firms: What the Data Reveals

A recent report, “Strategic Sector Insights for the Legal Profession 2025: Mid-Sized Firms”, published by The Law Society and MHA, reveals a striking trend:

👉 More than 50% of mid-sized law firms report that their lawyers bill less than 25 hours per week on average.
👉 Less than 3% of lawyers at these firms bill anywhere close to the full 40-hour workweek.

While it’s unrealistic to expect lawyers to bill every hour they work, these numbers highlight why alternative pricing models are a key priority for firm leaders in 2025.

⚖️ What does the future of legal pricing look like? If you’re exploring value-based pricing, subscription models, or hybrid fee structures, let’s talk!

📩 DM me to discuss innovative pricing strategies for law firms.

Thomson Reuters Releases 2024 Midyear Update on the Australian Legal Market – Key Takeaway

Earlier today, the Thomson Reuters Institute published its Midyear Update on the Australian Legal Market, providing valuable half-year insights into industry trends in the Australian legal market.

There’s a lot to unpack in the Report, and I highly recommend you download it. That said, here are my top takeaways:

✅ What’s Happening with Non-Equity Partners?
Is there an underlying story in the Non-Equity Partner segment? The data suggests there might be more to explore.

✅ Equity Partners Carrying the Load?
If legal market demand and worked rates are up in 2024, yet the average billable hours per lawyer are down, it raises a big question—are Equity Partners absorbing the extra workload? If so, why?

✅ Billable Hours Decline
With 12 months in a year, many law firms have lawyers billing less than 1,500 hours annually. What does this mean for profitability and productivity?

If you’re looking to refine your pricing strategy or need guidance on law firm profitability, feel free to get in touch. In the meantime, download the two-page update and see the data for yourself!

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Billable hour expectation for Associate Attorneys

I recently posted about the ‘Billable hours target for first-year lawyers at selected [Australian] law firms‘ and one of the most read posts on this blog is from way back in August 2016 – ‘Why asking someone to work 2,000 billable hours a year will kill their spirit‘, so when the Managing Partner Forum recently published the above results (admittedly from mostly American Managing Partners) from an audience polling question at one of its webinars on the issue of billable hour expectation for Associate Attorneys, I thought I would share it.

It’s interesting to note that nearly 70% of respondents expect their Associate Attorneys to bill over 1700 hours a year, with almost 10% expecting over 1900 billable hours per year.

That’s a lot of billable hours! And if we consider the ‘10-20-30-40 Leverage Rule‘, then the implication is very bleak for junior lawyers!

And as I say to those entering the legal profession who need some understanding of how many hours they need to work to meet their billable hour target, take a look at Yale Law School’s ‘The Truth About The Billable Hour‘.

While I am all for the profit motive, I maintain that if owners and managers of law firms want to understand why they have a high attrition / burnout rate in their teams, take a close look at what expecting someone to bill 1700 hours a year is actually doing to them!

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Are Directories out of favour?

Having just posted yesterday on ‘Directory and Award Submissions‘, I thought it was somewhat timely that the team at BTI Consulting published the results of a survey they have conducted with over 350 corporate counsel which showed:

  • Only 4% still find rankings valuable
  • 18% like them but aren’t strongly influenced
  • 33% are ambivalent
  • 45% express outright disinterest

Some of the commentary is just brilliant, including this gem:

“I assume all my attorneys are ranked somewhere.”

Go check out the article. It’s a good [short] read.

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