The size of your firm has no bearing on the amount you can charge clients.
Now if you have read the above quote and thought to yourself “of course the size of your firm has no bearing on the amount you can charge clients, clearly Smith has lost it again!“, then bear with me.
In a recent matter before the Central District of California, the Honorable Michael W Fitzgerald disagreed with the notion that the size of a law firm should have no bearing on the amount you can charge clients when he stated:
โit is simply unreasonable to award big law rates to a four-person firm representing mom-and-pop warehouses.โ
In what is otherwise far reaching commentary on the history and application of the billable hour (well worth a read in itself), Fitzgerald’s ruling is troubling; not least because it is based on a premise that bigger means better โ and better means more expensive. Now that could be true. But it doesn’t make it so.
Conversely, should I, as a client, be happy to pay more because the attorney acting on my matter works in a firm that has seven floors over one that has one? Surely the answer here is “no”, I’m paying for outcomes over inputs.
But that’s not the case here. If we follow Fitzgerald’s reasoning in this case, the real drivers of price: (a) Perceived expertise and relevance; (b) Client experience and accessibility; and (c) Outcome certainty and risk management, are certainly consideration, but no longer primary.
Read pretty much any report on the legal market over the past 20 years and the story is the same: Growth, growth, growth. But, a recent report by legal advisory boutique Taha & Watmough would suggest that, while that may be true at some level, the real story is a little less rosy.
Nearly all top [UK] 100 firms have seen real-terms rises in revenue and profit over the past ten years;
60% of firms have seen their revenue per lawyer fall in real terms;
60% of firms have seen profit per lawyer shrink;
More than a third of firms have seen partner profits decline.
Meaning the average equity partner at a top 100 [UK] law firm is earning less [in real terms] today than 10 years ago.
Given the rise in salaries and other costs here in Australia over that period, I wouldn’t see our numbers as being too different to those above.
So the next time you see stats telling you how well law firms are doing, remember:
โVanity metrics are the fine China of analytics โ pretty to look at, but useless at the table.โ
Get in touch if you want to have a chat about how you can sustainably grow your firm
Earlier today The ๐๐ถ๐ด๐ต๐ณ๐ข๐ญ๐ช๐ข๐ฏ ๐๐ช๐ฏ๐ข๐ฏ๐ค๐ช๐ข๐ญ ๐๐ฆ๐ท๐ช๐ฆ๐ธ published the results of its Law Graduate Salary Range Survey.
Makes for an interesting read. On the one hand, nowhere near as high as overseas markets such as London, HK and the US. On the other hand, Grads on A$130K would have been unthinkable 5 – 10 years ago!
๐๐ผ๐ ๐บ๐๐ฐ๐ต ๐ถ๐ ๐ฎ ๐ต๐ฎ๐ป๐ฑ๐ฏ๐ฎ๐ด ๐๐ผ๐ฟ๐๐ต? In this case, a staggering A$15.3 million.
๐ง๐ต๐ฒ ๐๐ฎ๐น๐๐ฒ ๐ผ๐ณ ๐๐๐ผ๐ฟ๐๐๐ฒ๐น๐น๐ถ๐ป๐ด Unlike most handbags however, this one has a story to tell.
It was the very first Birkin bag.
Designed by Hermรจs executive Jean-Louis Dumas in 1984, following a chance encounter on a flight with actress and singer Jane Birkin (hence the name), the bag was used daily by Birkin for nearly a decade before she donated it to an Aids Charity auction.
What the sale of this bag evidences though is how value extends beyond material worth. Value is not the $$$ signs you seen on the price-tag; it’s about the stories we tell, the history we preserve, and the emotional connections we forge.
The sale of this bag is a powerful reminder to professionals that authenticity and narrative can elevate your service offering from ordinary to iconic.
It is your powerful – and likely only – differentiator. It is what clients are willing to pay for.
As we navigate 2025, Australian midsize law firms find themselves at a pivotal crossroadsโbalancing 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 whatโs shaping the future for these firms.
Hereโs s summary of what you need to know from the Reportโand how your firm can stay ahead.
๐ฏ Client Satisfaction: The Cornerstone of Growth
Itโs clearโclient satisfaction is king. 71% of midsize firms rank it as their top priority for protecting and growing revenue. But itโs not just about delivering legal outcomes; itโs 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.
โ Takeaway: If your firm isnโt investing in client experience, youโre leaving growth on the table.
๐ฅ 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.
โ Takeaway: Create a workplace where talent thrivesโoffer challenging work, clear career paths and ensure your pay structures remain competitive.
๐ป 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.
Thereโs 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.
โ Takeaway: Embrace technologyโnot to replace people, but to empower them. Automation can reduce workloads, freeing your team to focus on high-value client interactions.
๐ Cybersecurity: More Than Just ITโs Problem
With client trust on the line, cybersecurity is non-negotiable. Yet, the biggest risk isnโt technologyโitโs human error. Over 63% of firms cite staff behaviour (think password sharing, weak authentication practices) as their top vulnerability.
โ 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.
๐ 5 Strategies for Midsize Law Firm Success in 2025
Acknowledge Tech Scepticism: Start small, demonstrate wins, and build confidence in automation.
Prioritise Efficiency: Use automation to tackle time constraints and free up your team for strategic work.
Enhance the Client Experience: Leverage digital tools to complement your personal service.
Strengthen Cybersecurity: Focus on both technology and employee awareness.
Put People First: Foster engaging work environments and ensure competitive compensation.
Final Thoughts
2025 presents both challenges and opportunities for Australiaโs 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.
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 challengesโand opportunitiesโfacing 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:
๐ 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.
โ๏ธ 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 challengesโfrom the rise of artificial intelligence (AI) and ESG expectations to mental health, diversity and the integrity of justice systems.
๐ Key Insights from the 2024 Survey
1. AI Is the Game-Changer (But Readiness Is Lacking)
AI remains the most talked-about disruptorโand 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 trainingโnot just tech implementation.
2. Mental Health Is a Rising PriorityโEspecially 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 donโt 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 talentโthough 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 impactโpossibly because they lack a clear โownerโ within organizations. However, political uncertainty (e.g., elections, legislative changes) is now drawing more attention due to its direct commercial relevance.
๐ 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.
Climate and Justice System Impact: Low on the radar now but rising fast.
๐งญ 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 roadmapโnot 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
The recently published 2025 EY Law General Counsel Study reveals how corporate in-house legal departments are responding to major external disruptionsโranging from geopolitical instability and regulatory complexity to technological transformationโto 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.
๐ Key Findings
1. ๐ Legal Teams Face Rising External Pressures
In-house legal departments identify three major disruptors shaping their strategies:
๐ Geopolitical uncertainty (76%)
๐ Complex regulatory environments (75%)
๐ก Rapid technology evolution (74%)
These factors are pushing legal teams to rethink their approaches to compliance, governance and operational efficiency.
๐ 83% of legal departments expect budget increases in 2025.
However, 87% cite cost control as a top priority ๐ฐ
61% point to limited budgets as a significant hurdle in optimizing legal sourcing strategies ๐ผ
๐ Strategic Recommendations
1. ๐ง Gain Deeper Operational Insights
Engaging stakeholders and assessing operational maturity enhances planning and execution. Yet only 11% of departments conducted stakeholder interviews last yearโan untapped opportunity.
2. ๐ต Optimize Legal Spend and Increase Transparency
With only 24% completing recent spend assessments, legal departments should:
๐ Analyze spend in detail
๐ณ Consider chargebacks
๐ Improve transparency and financial oversight
3. ๐ค Embrace a Diversified Legal Sourcing Model
To increase agility and expertise:
Legal teams are tapping into Alternative Legal Service Providers (ALSPs) โ๏ธ
60% plan to increase ALSP usage in the next year โฉ
4. ๐งโ๐ซ Invest in Legal Talent Development
With 64% prioritizing upskilling and reskilling, focus areas include:
๐ฑ Employee well-being
๐งญ Career development
๐ฏ Talent retention
5. ๐ Align Risk Management Across the Enterprise
Fewer than 50% have a clearly defined risk governance model:
๐ค Cross-functional collaboration is essential
โ ๏ธ Clear standards and risk tolerance must be established
6. ๐ค Leverage Legal Technology and Emerging Tools
While 75% aim to refine their legal tech strategies, only 25% prioritize Generative AI (GenAI):
๐ Opportunity to automate tasks like contract review and compliance
๐งฉ Build a tech roadmap that aligns with business goals
๐ 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.
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:
๐ 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.
๐ฐ 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 AIโs 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.
๐ Client Acquisition & Marketing Strategies
Mid-sized firms use multiple marketing channels: websites, SEO consultants, social media, online reviews, and referrals.
Theyโre 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 helpfulโa missed opportunity.
๐ธ 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 rapidlyโshowing a strong focus on tech and professional development.
โ๏ธ Cloud Technology Adoption
Mid-sized firms lag behind smaller firms in cloud adoption (only 38% vs. 71%).
Firms with 20โ49 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.
๐งญ Strategic Takeaways
Mid-sized firms embracing AI + modern billing models + tech investments are poised to outpace competitors.
The real threat isnโt automationโitโs firms that adapt faster.
Cloud-based tools, client intake tech, and AI are critical for efficiency, growth, and client satisfaction.
RWS_01's B[D]log 