Strategic sector insights – the key drivers of any professional practice firm… the people!
Jessica Durkin · Posted on: March 14th 2025 · read
On 20th January 2025, the law society published their report in association with MHA which dives into the strategic decisions and insights of mid-sized law firms. However, the results of the report extends beyond law firms, offering valuable insights for all professional practice firms.
A key discussion point of the report is people, who are at the heart of any professional practice firm and arguably the most important factor in ensuring its continuity.
All firms will identify that one of their biggest threats is how to retain their most talented staff. The market continues to remain buoyant against current economic challenges and therefore the demand for recruiting more staff remains strong. Given the increase in opportunities, this does give disgruntled staff members more power to review the market and compare packages on offer.
So how many firms are battling against a high turnover of staff?
The report identifies that, on average, 1-10% of employees move firms every year.
The full results of the survey are detailed below -
Percent (%) of firms in the sample with staff turnover ranges
The more important question to ask is why firms believe their staff are considering leaving.
It won’t come as a surprise that the top answer was remuneration, which was referenced by 34.9% of respondents. Certain economic challenges, including the current cost of living crisis and challenges getting onto the property ladder, are reasons for employees to re-evaluate their own financial circumstances. With the latest hit to professional firms being the national insurance hike, adding an additional minimum cost of £615 per employee, it is reasonable to assume that most firms are unlikely to offer an above inflation salary increase.
The next most common answer for this question was the relocation of staff, amounting to 15.5% of votes. This is less of a threat for national firms and more of a risk for independent firms operating in one geographic location.
The final point to note is that 13.2% of firms believed that employees were leaving due a lack of progression in their role. Is this the fault of firms failing to promote career paths and opportunities internally or are employees setting unrealistic expectations and timeframes? Succession planning is another key topic explored in the full report, and this certainly raises the question of whether these plans are being effectively communicated to those who management deem to be the leaders of tomorrow.
Interestingly workload was relatively low down on the list of reasons for staff moving on. With the change in attitudes of Gen Z, we expect that this will become an increasing issue in the coming years as work/life balance moves higher on the decision making ladder. The findings in the report identify that when employees are exploring the market, one of the most important factors they consider is a firm’s flexible working policy. For some, it may even be the deciding factor between accepting a job offer or not!
of firms believed that employees were leaving due a lack of progression in their role.
Since COVID-19, the report indicates that 88% of law firms have adopted some kind of flexible working policy. While this policy may vary across different firms, this typically allows employees to work from home and flex their working hours around their lifestyle. The report highlights, as reflected by the high percentage, that firms are under pressure to offer a fair and competitive policy in this respect.
Such policies should be balanced with the needs and demands of the business, one of which, is maintaining the productivity of staff. Yet the survey revealed that the majority of firms (83.8%) reported an increase or same level of productivity under their hybrid working policy. It therefore seems like a win-win situation for firms, right?
the survey revealed that the majority of firms (83.8%) reported an increase or same level of productivity under their hybrid working policy.
While a hybrid working policy can offer numerous benefits, the report highlights the greatest consequence of this policy, being the impact on office culture. What was once a fully occupied office, where employees would interact daily with colleagues, is seeing a shift in footfall resulting in lower face to face interactions. The results of the report show a split opinion on the matter with 30.9% seeing a decline in the office culture, whilst 29.4% firms saw an improvement.
Other threats of a hybrid working policy include the impact on junior staff members who are likely to miss learning and development opportunities whilst working in isolation. This could be one of the reasons that some firms are reportedly tightening their policy on the matter. This is a difficult balancing act for firms – it appears that the industry has not yet reached a settled equilibrium, it will be interesting to see the long term direction of travel.
This article discusses just one of the topics addressed in our report. Other key topics include: firms’ growth strategies, ideas to improve net profits, the comparison and impact of charge-out rates, the effects of new technology (including our new friend or foe, AI), and even more!
The full report can be accessed by clicking the button below:
