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Legal Data & Metrics

Insights in Action: For law firms still struggling with collaboration, there are ways to be smarter about working together

Jen Dezso  Director of Client Relations / Thomson Reuters

· 7 minute read

Jen Dezso  Director of Client Relations / Thomson Reuters

· 7 minute read

Collaboration within law firms is key to unlocking a plethora of additional benefits, including a higher share of clients’ spending; however, it takes structural and cultural changes within a firm to really make it happen

As someone who tracks legal market trends and opportunities, I’ve been invited to my fair share of law firm retreats over the last 20 years. Inevitably, at some point during the event, the focus turns to collaboration and teamwork. And now with demand for legal services largely stagnating after the boon of 2021, the call to work together to better grow client relationships and increase business is bound to be a hot topic during law firms’ 2024 retreats.

Yet for all the talk around increasing collaboration and institutionalizing client relationships, many law firms largely miss the mark in building effective cross-functional teams. Indeed, there are several key points that are most frequently absent from the discourse around collaboration in law firms.

Strong collaboration can increase your share of client business

Client institutionalization is the degree to which a client is integrated into a law firm’s services, culture, and network. Client institutionalization matters because it leads to higher client loyalty, retention, and satisfaction. Most importantly, it increases the share of wallet that a client spends with a specific firm.

Collaboration is the most powerful driver of client institutionalization. According to Thomson Reuters’ research, clients who identify collaborative teams within an outside law firm spend an average of 56% of their wallet at that firm — more than twice the average share of spend received by the firms that clients use the most.

Inherently, most law firm leaders — and lawyers themselves — understand that working together across the firm to better meet client needs will also build stronger and more lasting relationships. However, because the benefits of collaboration are intuitive and there’s a built-in desire to leverage collaboration, firms tend to neglect addressing exactly how they plan to collaborate.

Increased collaboration requires structural & cultural change

Collaboration is an intentional effort that law firms need to make. Without an intentional approach to collaboration, most firms end up with social collaboration — or an environment of collegiality in which lawyers enjoy working with other people in the firm, but don’t do so in a manner that seeks to grow client relationships.

So, why don’t lawyers collaborate organically? There are two main types of barriers to collaboration: structural and cultural.

Structural barriers

Structural barriers are those that relate to the physical or organizational aspects of the firm that hinder collaboration, such as geographical or technological challenges could impede working together. For example, lawyers who work in different offices or regions may have less opportunities to interact and build relationships with each other and may face challenges in coordinating and communicating across time zones.

Further, lawyers who lack the tech tools or platforms to facilitate collaboration — such as knowledge management systems, project management software, or video conferencing — may find it harder to share information, expertise, and feedback with their colleagues.

Yet for all the talk around increasing collaboration and institutionalizing client relationships, many law firms largely miss the mark in building effective cross-functional teams.

To overcome these structural barriers, law firms need to invest in the infrastructure and technology resources that enable collaboration. Indeed, many law firms that have stronger levels of collaboration have invested in technology that supports collaboration, such as client relationship management software, internal knowledge management systems, and well-organized intranets. These technologies can help lawyers access and share information, communicate, and coordinate with their colleagues, thereby delivering more efficient and consistent service to their clients.

Also, many law firms would greatly benefit from a more formal mechanism to bring their lawyers together from across disciplines. Lawyers naturally tap into others with similar expertise when they need additional support on matters and are less likely to look across practice areas and work types. By developing industry sector teams or key client teams, law firms can provide a structure for all their lawyers to develop a deeper understanding of clients’ specific needs, identify opportunities for cross-selling, and leverage the collective expertise and experience of the firm.

Cultural barriers

Cultural barriers are those challenges that relate to the attitudes or behaviors that lawyers have towards collaboration, including selfishness or individualism and a lack of trust in the process.

Many lawyers may prioritize their own interests or goals over those of the firm, especially in situations in which they may perceive that a shared approach may threaten their autonomy or compensation. Further, a lawyer’s reputation is of utmost importance and handing a client over to another lawyer with whom they are unfamiliar can be daunting. Fear of another lawyer delivering inconsistent quality or service is one of the most common barriers preventing collaboration.

Overcoming these sensitive cultural barriers, especially if they’ve unfortunately become the default attitude in a firm, is likely to be met with resistance by some of the firm’s lawyers and staff. However, there are solutions to this problem, such as financial incentivization, which aligns compensation and reward systems with collaborative activities, such as cross-selling, referrals, or teamwork.

Law firms also need to foster trust throughout their workforce by showing consistency. Indeed, as with many of the approaches already discussed, those law firms more effective at delivering a consistent quality of advice and service do so through formal initiatives, such as instituting client service standards and monitoring perceptions of consistency through client feedback programs.

Collaboration is an individual and firmwide effort

Even when firms build in better mechanisms to support collaboration, the reality is some individuals are less inclined to collaborate than others. Only about one-third of lawyers are high collaborators — those who are substantively more inclined to work with other lawyers across their practice and with lawyers in other practices, according to Thomson Reuters Institute’s research.

Those who don’t enjoy collaboration often can’t easily be forced to do it well. Leaning into those who are naturally inclined can both support efforts at client institutionalization while ultimately laying the groundwork for more satisfied lawyers.

To overcome these structural barriers, law firms need to invest in the infrastructure and technology resources that enable collaboration.

Firms should conduct an assessment of their lawyers to help identify which are more naturally inclined to collaborate and find out what they like about working in this way. Then, firms should identify those lawyers who enjoy the level of freedom and independence the firm provides, because they are likely not best suited to lead client teams and are less likely to enjoy collaboration. Instead, firms should place those who share a positive view of collaborative or cooperative work within the firm in that role.

When lawyers can work in a way that suits their natural preferences — whether more collaborative or more independent — they’ll ultimately be more satisfied. To find out this information, firms should query their lawyers to better understand which barriers most are impeding their ability to collaborate and solutions.

For example, if a lack of trust seems prevalent among a firm’s lawyers, it should consider conducting a client feedback study to assess consistency in service and quality, thereby building its lawyers’ confidence in each other. Or, if understanding a firm’s resources is a challenge, firms could build educational programs and technology solutions that help their lawyers better understand and tap into colleagues’ expertise.

As seen, there are several important methods by which law firms can leverage data and other solutions to help overcome structural and cultural barriers to collaboration, ultimately supporting those strategies that could then drive the firm toward better performance.

You can explore what metrics are most important to understanding a law firm’s level of collaboration alongside key benchmarking data.