With fragmented vaccine roll-outs and new coronavirus variants emerging, 2021 was far from “back to normal” for the business world at large. Throughout the year, the legal world continued to work and handle complex cases remotely, providing quality counsel to clients against a challenging backdrop. Indeed, last year saw a boom in business for many law firms. Mergers & acquisitions hit new highs, with 10,317 deals in Europe, up 49% on 2020, driving up the need for advice.1 While regulators played an increasingly active role in the markets, for example, with the EU’s plans to clamp down on Big Tech M&A with the Digital Markets Act.

2022 is likely to continue to be out-of-the-ordinary for law firms. I believe there are four things which will set the agenda in the legal community this year. Responding to these challenges will be critical to the long-term health and wealth of law firms.

Rethinking our people offer

Like many professions, the legal world is facing hiring shortages. It is well reported that certain practice areas, such as private equity, are facing unprecedented demand. Law firms sell their people’s time, so it is essential that, as a sector, we are making an offer to existing and new colleagues that is stimulating, flexible and well-compensated. We are beginning to see an increase in starting salaries and other changes to compensation packages. Just as important is a culture that encourages people to stay and develop professionally. 

Equipping teams for net-zero 

With climate change at the top of the ESG agenda, 2022 provides an opportunity to demonstrate the good that legal advice can help achieve. For example, as a sector, we are vital to helping organisations navigate the energy transition, be that through advising on deals to help clients reach net-zero or providing counsel on upcoming regulations. It is essential that firms ensure their teams have the skills and understanding of these complex issues to help clients achieve their climate goals. 

Improving diversity and inclusion

Firms will also need to ramp up efforts to improve the ‘social’ element of ESG – namely by ensuring the sector is truly representative of the locations in which we operate and plays its part in creating sustainable and inclusive communities. Across CMS we run a variety of programs in our various markets to encourage this. For example, in the UK, we provide three weeks of workshops, live projects and client meetings to show potential recruits the business of law. This is exactly the kind of investment that firms need to make if they are to secure a range of talented people from all walks of life. Firms that fail to encourage change will simply not survive.

Investing in technology

This year could also mark the point where law firms take full advantage of new technologies. With many now investing in hybrid working products and collaborative software that makes our clients’ lives easier, the sector has never been more connected. Over the long-term, such investment could drive us further away from a ‘BigLaw model’ to a more devolved, collaborative network of different firms. 

The notion that competing firms could work alongside each other and communicate and cooperate seamlessly would have been alien to most in the legal sector even a few years ago, but the times have changed quickly. At CMS, we have invested in lupl, an open industry platform designed to enhance the way that firms and in-house legal teams interact, bringing systems and information together into one secure space. Since launch, lupl has helped bring together a network of law firms and technology providers who believe there is a better, more efficient way to work together on legal matters. By taking advantage of these technological tailwinds, firms that invest now will set themselves up for an increasingly complex future. 

So, 2022 is likely to be a year of challenges and opportunities. The year ahead is going to test all firms, regardless of size or specialism. Success will only be achieved by planning ahead; those that sit tight and struggle to attract new and diverse talent, lack net-zero expertise and underinvest in technology will be setting themselves up for failure. While those that embrace change and turn these agenda points into action will set themselves up for an even more successful 2022.  

Sources

1 Mergermarket, as of 10 January 2022