Two-thirds of law firms and in-house legal departments are considering not extending bonuses to employees this year. A new survey reveals how they're rethinking hiring and pay.

  • A new survey on compensation and workforce trends, released by the Adecco Group on Tuesday, found that 71% of 200 law firms and in-house legal departments plan to backfill roles that were eliminated during the pandemic.
  • "The industry is in a go-forward mode. I think they will be hiring differently and their considerations are going to be different," said Nicole Gable, chief of sales of Adecco Group North America.
  • For instance, the survey suggests that there will be a greater emphasis on IT and tech: Nearly 40% of legal respondents said they expect their IT departments to expand.
  • Another implication of the survey is that a remote workforce, which the majority of law firms and legal departments now support, can also lead to greater diversity by expanding the pool of candidates they hire.
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Nearly three-fourths of law firms are considering forgoing bonuses to their employees in 2020, according to a new survey that reveals how the legal industry is thinking about hiring and pay as the coronavirus pandemic continues.

The Compensation and Workforce Trends survey, released on Tuesday by staffing company Adecco Group, found that 43% of legal respondents say salary decreases have been the most important cost savings initiative during the pandemic, followed by furloughs (38%) and eliminating bonuses (35%). Only a third believe their organization will "probably" or "definitely" give monetary bonuses this year.

Additionally, it found that 71% of 200 respondents from law firms and in-house legal departments plan to backfill roles that were eliminated during the pandemic.

Specifically, demand in IT is expected to be big among the legal industry due to remote work and the increased pressure to digitize, said Nicole Gable, chief of sales at Adecco Group North America.

She added that another effect of the shift to remote work is likely a more diverse workforce, as companies are no longer confining their job search to metropolitan areas with higher costs of living.

Read more: 'This is adapt or die time': Tech-savvy law firms make nearly 40% more in revenue than old-school ones — here's how new tools are helping lawyers get ahead

The survey's respondents also include more than 1,150 hiring decision-makers and managers across the accounting and finance, marketing, human resource, and administrative industries, and were asked questions about how they've coped with talent management, and how they're thinking about current and future hiring and retention.

"Information is the premium right now," said Gable. "Everyone is interested in what their competitors are doing."

Of the new hires that law firms and legal departments plan to make, IT is expected to expand the most

As businesses are regaining their footing amid the initial economic upheaval this year, 71% of legal respondents said they plan to backfill roles that had been eliminated during the pandemic, with 57% planning to do so in less than 6 months.

Gable said that while the backfill isn't a surprise, what is interesting is who will be hired for those spaces. 

Nearly 40% of law firms said that they expect their IT departments to expand, underscoring how companies are looking to bolster their technologies with the necessity of remote work and the acceleration toward digitization.

"The industry is in a go-forward mode," she explained. "I think they will be hiring differently and their considerations are going to be different, with a very big emphasis on coming up with tech solutions internally to maintain their culture, and to attract and retain the caliber of talent they want."

Law firms and companies are looking to develop "IT platforms that can let employees communicate quickly with each other and with their clients, in order to preserve culture," explained Gable.

On top of that, lawyers can use tech as a "value proposition," as clients are increasingly seeking efficiency and demanding more creativity," she added.

Though the survey didn't delve into specific jobs that were eliminated during the pandemic, it broke the roles down into categories like sales, customer service, legal, and human resources. Customer service departments saw the most cuts in the legal industry, with 35% respondents eliminating such roles. A quarter said they eliminated legal and law-adjacent roles.

Gable said there likely "won't be an apples-to-apples backfill." Instead, "there are going to be different investments. They're rethinking roles and how roles work with another."

Hiring a remote workforce not only leads to greater satisfaction and productivity but also more diversity

Respondents also said that more satisfied and productive employees were the most important benefits of hiring a remote workforce. Forty-two percent of law firms and legal departments said their organizations had previously opposed remote work but now support it, signaling a change in the industry's mindset.

Diversity is another key benefit to a remote workforce, said Gable. In a separate study, the Adecco Group found that there was a decrease in job postings in high cost-of-living areas like New York City — not because companies are no longer hiring in these cities, but because they're expanding their search to candidates in other areas.

Read more: An inside look at how Big Law firm Perkins Coie built up a diverse attorney base, winning major clients like Microsoft and Intel

This is especially the case as law firms are reconsidering the need for large, swanky offices, which come with hefty price tags.

Gable pointed out that only 41% of legal respondents said that new hires' geographic location still mattered, compared to 77% of respondents in the accounting and finance industries.

"The legal industry often has a reputation for not moving as quickly as others, but the data seems to suggest otherwise in this respect," she said. "It's an incredible opportunity for candidates who do not live in large metropolitan areas."

Overall, the survey suggests the possibility of a fundamental shift in the way the legal industry operates. "It's a new way of working in the future," said Gable.

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