Survey Identifies Top 5 Challenges Facing Small Law Firms

Survey Identifies Top 5 Challenges Facing Small Law Firms Thomson Reuters recently completed a survey of small law firms (less than 30 attorneys) to identify the biggest challenges these firms face and what they are doing to address them.

The top five challenges in order of importance include:

  1. New client acquisition
  2. Too much time spent on administrative tasks
  3. Cost control and expense growth
  4. Lack of internal efficiency
  5. Rate pressure from clients/clients demanding more for less

So how are small firms dealing with these challenges? Unfortunately, most are not:



% of firms identifying as moderate or significant challenge% of those firms NOT addressing that challenge
New client acquisition75%71%
Too much time spent on administration70%81%
Cost control and expense growth61%74%
Lack of internal efficiency60%72%
Rate pressure/more for less59%80%

One of the most interesting insights was how attorneys at small law firms spend their days. Attorneys in small law firms report spending almost 40% of their work day on tasks other than the practice of law. Survey respondents that rated their law firms as “very successful” reported 8.7% of their time is spent on administrative tasks, while those rating their law firms as “unsuccessful” reported spending almost twice as much time — 15.3% — on administrative tasks.

This chart shows what the survey respondents said were the important positive factors that drove firm performance over the past year:

The factor rated as most important was increasing referrals from existing clients, followed by becoming more efficient and growing relationships with existing clients. These were the top 3 most important factors that drove revenue for the firms surveyed in the past year.

Of note is an emerging challenge identified by 17% of survey respondents: DIY legal websites. In the previous year’s survey, this challenge was identified by only 11% of firms surveyed. Unsurprisingly, the smaller the firm, the more that DIY legal sites were viewed as a threat; only 3% of firms with 11-29 attorneys viewed these sites as a threat vs. 28% of firms with 2-3 attorneys.

What is most troubling about the results from this survey is that while small law firms can readily identify the challenges facing them, a majority are not addressing these significant barriers to their growth. Why?

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