Skip to content
Legal Marketplace

Small law firms in 2021: A chance to regroup and grow

Mark Haddad  General Manager / Small Law Firm business / Thomson Reuters

Mark Haddad  General Manager / Small Law Firm business / Thomson Reuters

As we move into 2021, small law firms shouldn't lose sight of the lessons of this past year, chiefly the spotlight it shone onto key lessons from years past

Farewell to 2020.

While I’m sure we’re all glad to see the start of something new, we can’t lose sight of the lessons from the past year. Actually, this past year did less to teach us new lessons than it did to bring a bright spotlight onto lessons from years past, especially for leaders of small law firms.

To this point, small law firms face a number of significant impediments to growing their businesses, and have for years. What’s more, those of you who lead small law firms know this, and our research confirms that. However, that same research also shows that most small law firm leaders, even when they’re aware of the challenges their firms face, do not take meaningful action to make things better.

Indeed, this may have been the two key issues highlighted in 2020: i) the resistance to meaningful change even in the face of known problems; and ii) the potential negative impact of persistent inaction.

The market for small law firm services is not going to get any less competitive. In fact, all indicators point toward increasing competition from new market entrants, ranging from online DIY legal self-help tools, to lawyers from much larger firms spinning off to start their own niche law practices.

At the same time, the same people who serve the clients of small law firms are also tasked with running the day-to-day operations of those firms and guiding their firms into the future. This administrative burden consumes, on average, 40% of a small firm attorney’s working time, leaving less time to serve clients and make money.

This is a nasty combination of circumstances — the need to invest time and energy to improve business development, coupled with a burdensome administrative demand that is necessary to keep the firm operational.

To be fair, how to course correct is not a simple fix. In fact, I’ve spent most of the past two years writing about that very thing. But the start of a new year is an excellent time to pose the question, “If not now, when?”


The two key issues highlighted in 2020 were: i) the resistance to meaningful change even in the face of known problems; and ii) the potential negative impact of persistent inaction.


A colleague of mine shared with me his experience from the last small firm in which he worked prior to leaving private practice. The firm’s intake system was outdated and cumbersome, gobbling up as much as 8 hours per week just to manage new files, which drastically cut down on the amount of time he could spend developing his business acumen and finding new clients. This, in turn, eventually led to a souring of his relationship with partners at the firm. One problem simply fed the other.

He knew that there was a solution by which he could simply streamline the intake process using relatively simple tools, but the thought of investing the time to actually put the pieces together — a matter of realistically maybe five or six hours — seemed like too much, given the other pressures he faced. Unfortunately, he didn’t look far enough ahead (in the spirit of having a planful approach) to see the ultimate benefit, and it cost him.

Looking back, that investment of time, while certainly an upfront burden, would have returned exponential benefits in time saved. Indeed, it was a lost opportunity — one to which I’m sure many small firm lawyers can relate.

So, where to begin in 2021 with setting a new course for your firm and addressing some of these long-standing challenges? The first step is to make a plan. That means identifying the goals you want to accomplish and figuring out which ones you need to address in the next 90 days, which ones you want to address within the next year, and which are more likely to take a few years of work. The biggest piece of this plan is to start with an honest evaluation of what you and your firm are good at, and just as importantly, what areas may need work. Then focus on improving where it is needed.

Once your goals are set, work backwards. What resources are required? And what discrete tasks do you first need to accomplish to reach those goals? This means dedicating time and money to the effort, of course; and in practical terms, it means making a different choice than the one made by my colleague.

To give one potential example, you could choose to focus on streamlining your firm’s administrative processes through automation, outsourcing, or just some baseline process reengineering with the goal being to ease some of the administrative burden. Another example could be to carefully consider revamping your firm’s business development efforts by examining how you go to market today and whether you are actually reaching your intended potential clients.

Above all, focus on taking meaningful action. I’ve used the term “relative inaction” previously to describe the process of doing something for the sake of “doing something” rather than doing something impactful. Putting effort into actions that have little hope of leading to the intended result may actually be worse than putting in no effort at all because relative inaction squanders valuable resources.

But carefully considered, planful action can reap large rewards, even when the task that’s completed or the goal that’s achieved is relatively small.

When I wrote about the 2020 Report on the State of U.S. Small Law Firms, I wrote that “small law firms are agile, adaptable, resilient, and yet hesitant to change. Or so it would appear… .” Now, as we watched 2020 depart, there is no doubt that many of us are still feeling the systemic aftershocks. Yet, there is also optimism and a chance to challenge the status quo in the coming year. So, here’s to a successful and growth-filled 2021!

More insights