Firms have been deleveraging (reducing the ratio of associates to partners) for the past decade in response to client pressure to reduce costs. Although the economy is recovering, deleveraging is expected to continue to impact law firm staffing for the foreseeable future.

Life After Leverage ALM Legal Intelligence

 American Lawyer Legal Intelligence recently released a new report “Life after Leverage: New Models of Law Firm Staffing.” The report was based on a survey of Am Law 200 partners, associates and paralegals in November 2011

Key findings outlined in the report include:

1. The deleveraging trend will continue. Partners have been doing more work relative to associates and this is expected to continue over the next 3 years.

2. Firms are likely to have 2 tiers of non-equity partners and 2 tiers of associates. Non-equity partners will be divided into permanent and temporary (with a shot at equity partnership). Associates will also have two tiers permanent or career associates and partner track associates.

3.Paralegals will become more important. As client pressures continue, paralegals who bill at lower rates will take over an increased proportion of associate work.

4. Law Firms and Legal Departments will increase their use of outsourced services. Routine work will go to LPOs. More complex work will be sent to lawyer staffing firms who will provide highly qualified lawyers for more complex project based work.

5. Performance Measurement for both partners and associates is of increasing importance. Performance will not only measure billable hours, but also business development skills and industry expertise.

6. Laterals Rule. A law firm’s reputation has become less important to clients who are now increasingly searching for expertise. The rivalry for partners with expertise is reshaping the marketplace.

Implications for Information Professionals. Librarians and information professionals are not mentioned in this survey. However it is easy to recognize how they could present comparable, if not greater benefits than paralegals in the new leverage models. Librarians have specialized research skills which can be harnessed to improve efficiency of research assignments and projects. As clients focus on the value of expertise, firms should not overlook the value of in house research expertise. Many law librarians hold JD degrees but bill at lower rates than associates. As physical libraries shrink – the proportion of client support work performed by library and research staff will increase. The transformation of libraries will accelerate the transformation of librarians into specialized research experts  who are tightly aligned with practice groups*  where they will gain visibility and more easily be assigned to “leverage enhancing” projects.

*See: Cindy Adams recent blog post on “embedding” library staff at 3 Geeks and a Law Blog post Out of Sight Out of Mind