Adjusting to the Hybrid Work Paradigm: Smart Growth Strategies for Colorado Law Firms
| Publication year | 2024 |
| Citation | Vol. 53 No. 3 Pg. 12 |
| Pages | 12 |
LAW PRACTICE MANAGEMENT
BY GENE COMMANDER
A trifecta of demographic, economic, and professional trends is engulfing lawfirms in Colorado and across the nation. As I've recently outlined in these pages,[1] shrinking college and law school enrollment, the exit of baby boomers from the profession, a price war for talent, and high attrition rates—especially among women and people of color—are among the forces that are contracting the talent pipeline. Meanwhile, the face of the profession is steadily shifting as women and people from other diverse backgrounds make up an increasing proportion oflawyers.2 Lawfirms are finding that the playbook they've relied on for decades isn't solving the talent conundrum, and innovative solutions are desperately needed.
Against this backdrop, the phenomenon of hybrid and remote work has emerged.[3]The pandemic propelled an already-growing movement toward working from home. As of fall 2023, Americans worked from home about 25% of the time, while office occupancy rates across the United States had fallen to roughly half their pre-pandemic levels.[4]
This article explores how hybrid work is affecting law firms in Colorado, including the status of this trend, advantages and disadvantages of hybrid business models, and strategies to help law firm leaders effectively respond to the hybrid wave while positioning themselves for success in the battle for affordable and productive talent.
The Trend Toward Hybrid Work in Law Firms
To start, what do we know about how law firms are engaging in the hybrid work phenomenon? Nationwide, hybrid work rates have cooled somewhat since early in the pandemic.[5] In 2023, Bloomberg Law found an increase in law firm policies that require more in-office days.[6] Many larger firms have instituted a four-day office workweek,[7] and Thomson Reuters Institute likewise reported a decline in remote work at small law firms, with 61% of such firms permitting some remote work in 2023, down from 68% in 2022.[8] Overall, data from Clio suggests that the hybrid trend is not quite as earth-shaking as many assume: legal professionals spent a median number of 13 days each month in the office in 2022, compared to 14 days before 2020.9 Although hybrid work is commonplace in law firms, fully remote work is not the norm,[10] so this article focuses on hybrid models.
In Colorado, half of respondents to Law Week Colorado's 2023 State of the Law Firm Survey said their firm requires or suggests three days per week in the office, while roughly 15% said their firm requires or suggests five days.[11]Other information on hybrid work rates among Centennial State law firms is largely anecdotal. For instance, Law Week Colorado reported that as of March 2023, several of the state's largest firms lacked strict rules for in-office work but encouraged frequent presence.[12]
Looking ahead, preferences for hybrid work are unlikely to fade. In fact, Stanford economist Nicholas Bloom predicts hybrid work rates will increase over the coming decade.
When it comes to talent strategies, many law firms have been forced to confront a new reality: workers have more bargaining power and are unequivocally demanding hybrid and remote work options. According to McKinsey &Company, "Most employees say that opportunities to work remotely and have control over their schedules are top company benefits, second only to health care."[13] Indeed, research suggests that employees value the ability to work from home two days a week as equivalent to roughly an 8% salary increase.[14] And dissatisfied employees will vote with their feet—the desire for a flexible work arrangement was the third most-cited reason for searching for a newjob in a McKinsey survey.[15] In Colorado specifically, more than half of respondents in the State of the Law Firm Survey agreed or strongly agreed with the statement that "flexible remote working policies are a significant factor in my choice of firm."[16]
Preferences for hybrid work hold strong across generational, gender, racial, and other lines. Yet there are nuanced differences based on demographic factors. According to research cited in The New York Times, "[w]orkers over 55 (mostly boomers) prefer to work remotely around 35% of the time, while workers in their early twenties (Gen Z) preferred to be remote about 45% of the time and workers in their 30s and 40s preferred to work from home closer to half the time."[17] Although these figures indicate that many employees favor working at least partly in the office, fully in-office models are likely a nonstarter for law firms seeking to attract up-and-coming talent. A survey of Gen Z members in the legal field found that "86% of respondents expect to have the flexibility to work remotely as they desire or on occasion."[18]
Beyond intergenerational differences, data show that women and people of color place particularly high value on hybrid or remote work. For instance, an American Bar Association (ABA) survey found that 54% of female lawyers compared to just 31% ofmale lawyers viewed the ability to work remotely on a schedule of their choosing as a very or extremely important factor in deciding whether to change jobs.[19] And a full half of respondents who were persons of color said this factor was very or extremely important, compared to 40% of white respondents.[20]
Looking ahead, preferences for hybrid work are unlikely to fade. In fact, Stanford economist Nicholas Bloom predicts hybrid work rates will increase over the coming decade.[21] Because younger generations and women represent a growing share of the legal workforce, law firm leaders who turn a blind eye to preferences for hybrid work will see their talent walk out the door. Thus, forward-thinking leaders need to be proactive and use the hybrid work trend to their firm's advantage.
Advantages of Hybrid Work
Recognizing that hybrid work is here to stay, what should law firm leaders know about the strengths and weaknesses of hybrid models? First, the advantages:
Improved Recruiting and Retention
As shown above, a major advantage of hybrid work models is enhanced talent recruiting and retention. Law firms in Colorado are confronting unsustainable attrition rates across all demographic categories. The State of the Law Firm Survey found that more than half of respondents expected to leave their current firm within six years, while about 28% anticipated leaving within three years.[22] The legal talent pool is expected to contract as more baby boomers leave the profession and as college and law school enrollment rates fall. Indeed, college enrollment is expected to plunge starting in 2025,[23] and law school enrollment in 2022 (116,723) was roughly 80% of its peak level in 2010 (147,525).24 At the same time, the demographic makeup of the lawyer population is shifting: female lawyers younger than 40 with active Colorado licenses now outnumber their male counterparts.[25]
In the ever-tightening legal market, law firms simply cannot afford a catch-and-release talent model in which they hire and invest in newly minted lawyers, only to see them leave within a few short years. This model is untenable given the steep price firms pay to replace departing lawyers. Several months' lost revenue combined with the opportunity cost of the time spent recruiting and onboarding new talent to replace an associate can easily amount to three to four times the associate's salary.[26] Law firms—particularly the small and midsize firms that can't match the top salaries offered by national firms—must use every possible recruitment and retention advantage to secure productive talent for the long term. Given the strong preferences for hybrid work,
especially among women, it's clear that firms must offer hybrid work options to compete for top-notch labor. Notably, firms are also facing stiff competition to hire and retain nonlawyer staff,[27] and hybrid models can provide an effective solution for most nonlawyer positions.
Enhanced Work/Life Balance
It's not complicated: working from home largely promotes work/life balance. Not traveling to an office saves time spent getting ready and commuting, allows professionals to work the hours that best match their own schedule and preferences, enables parents and caregivers to fulfill family obligations, and more. Many hybrid workers also experience reduced levels of fatigue and burnout,[28] which in turn benefits employers by increasing productivity and retention levels. Parents of dependent children, in particular, widely report that hybrid work enables them to better balance work and family obligations while improving their mental health and reducing stress levels.[29] At the same time, both hybrid employees and their supervisors should guard against blurring the lines between work and home.[30]
Improved Experience for Women and People of Color
Hybrid work models are often preferred by women and people of color—the very populations whose law firm attrition rates are highest. Women who work remotely report fewer demeaning experiences such as receiving inappropriate comments about their appearance or being mistaken for someone in a more junior role.[31] And hybrid work carries great benefits for working parents—especially for women, who typically carry a disproportionate share of the parenting load.[32] Perhaps unsurprisingly, "one in five women say flexibility has helped them stay in their job or avoid reducing their hours," according to McKinsey.[33] Hybrid models also dovetail with nontraditional staffing strategies that may be appealing to parents in young families.
Yet women also experience greater risks associated with hybrid work models. Research suggests that junior women working from home receive even less feedback on their...
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