Adjusting to the Hybrid Work Paradigm

Smart Growth Strategies for Colorado Law Firms

April 2024 By Gene Commander

A trifecta of demographic, economic, and professional trends is engulfing law firms in Colorado and across the nation. As I’ve recently outlined in these pages,1 shrinking college and law school enrollment, the exit of baby boomers from the profession, a price war for talent, and high attrition rates—especially among women and people of color—are among the forces that are contracting the talent pipeline. Meanwhile, the face of the profession is steadily shifting as women and people from other diverse backgrounds make up an increasing proportion of lawyers.2 Law firms are finding that the playbook they’ve relied on for decades isn’t solving the talent conundrum, and innovative solutions are desperately needed.

Against this backdrop, the phenomenon of hybrid and remote work has emerged.3 The pandemic propelled an already-growing movement toward working from home. As of fall 2023, Americans worked from home about 25% of the time, while office occupancy rates across the United States had fallen to roughly half their pre-pandemic levels.4

This article explores how hybrid work is affecting law firms in Colorado, including the status of this trend, advantages and disadvantages of hybrid business models, and strategies to help law firm leaders effectively respond to the hybrid wave while positioning themselves for success in the battle for affordable and productive talent.

The Trend Toward Hybrid Work in Law Firms

To start, what do we know about how law firms are engaging in the hybrid work phenomenon? Nationwide, hybrid work rates have cooled somewhat since early in the pandemic.5 In 2023, Bloomberg Law found an increase in law firm policies that require more in-office days.6 Many larger firms have instituted a four-day office workweek,7 and Thomson Reuters Institute likewise reported a decline in remote work at small law firms, with 61% of such firms permitting some remote work in 2023, down from 68% in 2022.8 Overall, data from Clio suggests that the hybrid trend is not quite as earth-shaking as many assume: legal professionals spent a median number of 13 days each month in the office in 2022, compared to 14 days before 2020.9 Although hybrid work is commonplace in law firms, fully remote work is not the norm,10 so this article focuses on hybrid models.

In Colorado, half of respondents to Law Week Colorado’s 2023 State of the Law Firm Survey said their firm requires or suggests three days per week in the office, while roughly 15% said their firm requires or suggests five days.11 Other information on hybrid work rates among Centennial State law firms is largely anecdotal. For instance, Law Week Colorado reported that as of March 2023, several of the state’s largest firms lacked strict rules for in-office work but encouraged frequent presence.12

When it comes to talent strategies, many law firms have been forced to confront a new reality: workers have more bargaining power and are unequivocally demanding hybrid and remote work options. According to McKinsey & Company, “Most employees say that opportunities to work remotely and have control over their schedules are top company benefits, second only to health care.”13 Indeed, research suggests that employees value the ability to work from home two days a week as equivalent to roughly an 8% salary increase.14 And dissatisfied employees will vote with their feet—the desire for a flexible work arrangement was the third most-cited reason for searching for a new job in a McKinsey survey.15 In Colorado specifically, more than half of respondents in the State of the Law Firm Survey agreed or strongly agreed with the statement that “flexible remote working policies are a significant factor in my choice of firm.”16

Preferences for hybrid work hold strong across generational, gender, racial, and other lines. Yet there are nuanced differences based on demographic factors. According to research cited in The New York Times, “[w]orkers over 55 (mostly boomers) prefer to work remotely around 35% of the time, while workers in their early twenties (Gen Z) preferred to be remote about 45% of the time and workers in their 30s and 40s preferred to work from home closer to half the time.”17 Although these figures indicate that many employees favor working at least partly in the office, fully in-office models are likely a nonstarter for law firms seeking to attract up-and-coming talent. A survey of Gen Z members in the legal field found that “86% of respondents expect to have the flexibility to work remotely as they desire or on occasion.”18

Beyond intergenerational differences, data show that women and people of color place particularly high value on hybrid or remote work. For instance, an American Bar Association (ABA) survey found that 54% of female lawyers compared to just 31% of male lawyers viewed the ability to work remotely on a schedule of their choosing as a very or extremely important factor in deciding whether to change jobs.19 And a full half of respondents who were persons of color said this factor was very or extremely important, compared to 40% of white respondents.20

Looking ahead, preferences for hybrid work are unlikely to fade. In fact, Stanford economist Nicholas Bloom predicts hybrid work rates will increase over the coming decade.21 Because younger generations and women represent a growing share of the legal workforce, law firm leaders who turn a blind eye to preferences for hybrid work will see their talent walk out the door. Thus, forward-thinking leaders need to be proactive and use the hybrid work trend to their firm’s advantage.

Advantages of Hybrid Work

Recognizing that hybrid work is here to stay, what should law firm leaders know about the strengths and weaknesses of hybrid models? First, the advantages:

Improved Recruiting and Retention

As shown above, a major advantage of hybrid work models is enhanced talent recruiting and retention. Law firms in Colorado are confronting unsustainable attrition rates across all demographic categories. The State of the Law Firm Survey found that more than half of respondents expected to leave their current firm within six years, while about 28% anticipated leaving within three years.22 The legal talent pool is expected to contract as more baby boomers leave the profession and as college and law school enrollment rates fall. Indeed, college enrollment is expected to plunge starting in 2025,23 and law school enrollment in 2022 (116,723) was roughly 80% of its peak level in 2010 (147,525).24 At the same time, the demographic makeup of the lawyer population is shifting: female lawyers younger than 40 with active Colorado licenses now outnumber their male counterparts.25

In the ever-tightening legal market, law firms simply cannot afford a catch-and-release talent model in which they hire and invest in newly minted lawyers, only to see them leave within a few short years. This model is untenable given the steep price firms pay to replace departing lawyers. Several months’ lost revenue combined with the opportunity cost of the time spent recruiting and onboarding new talent to replace an associate can easily amount to three to four times the associate’s salary.26 Law firms—particularly the small and midsize firms that can’t match the top salaries offered by national firms—must use every possible recruitment and retention advantage to secure productive talent for the long term. Given the strong preferences for hybrid work, especially among women, it’s clear that firms must offer hybrid work options to compete for top-notch labor. Notably, firms are also facing stiff competition to hire and retain nonlawyer staff,27 and hybrid models can provide an effective solution for most nonlawyer positions.

Enhanced Work/Life Balance

It’s not complicated: working from home largely promotes work/life balance. Not traveling to an office saves time spent getting ready and commuting, allows professionals to work the hours that best match their own schedule and preferences, enables parents and caregivers to fulfill family obligations, and more. Many hybrid workers also experience reduced levels of fatigue and burnout,28 which in turn benefits employers by increasing productivity and retention levels. Parents of dependent children, in particular, widely report that hybrid work enables them to better balance work and family obligations while improving their mental health and reducing stress levels.29 At the same time, both hybrid employees and their supervisors should guard against blurring the lines between work and home.30

Improved Experience for Women and People of Color

Hybrid work models are often preferred by women and people of color—the very populations whose law firm attrition rates are highest. Women who work remotely report fewer demeaning experiences such as receiving inappropriate comments about their appearance or being mistaken for someone in a more junior role.31 And hybrid work carries great benefits for working parents—especially for women, who typically carry a disproportionate share of the parenting load.32 Perhaps unsurprisingly, “one in five women say flexibility has helped them stay in their job or avoid reducing their hours,” according to McKinsey.33 Hybrid models also dovetail with nontraditional staffing strategies that may be appealing to parents in young families.

Yet women also experience greater risks associated with hybrid work models. Research suggests that junior women working from home receive even less feedback on their performance than do their male peers.34 Further, women are often confronted with more unwarranted questions about their productivity levels than men,35 and while this phenomenon exists with both in-office and at-home work, remote work is likely to exacerbate the already stricter level of scrutiny. At the same time, women cannot resolve differential treatment simply by logging their hours at the office, as studies show that male on-site workers receive more mentoring opportunities and greater recognition of their accomplishments than their female colleagues.36

The upshot is that law firms can greatly support the needs of women and people of color by adopting effective hybrid work models and thereby reduce attrition levels. But firm leaders will need to institute meaningful policies and practices to ensure that no one is disadvantaged by the choice to engage in hybrid work, as addressed in the recommendations below.

Increased Productivity

While some employers may doubt that employees give their jobs their full attention when working from home, well-designed hybrid models in fact strengthen the productivity of talent with proven competency. Productivity can rise for several reasons: Americans save on average 70 minutes per day by not commuting to their jobs and spend about half an hour of that time on their work;37 an in-home setting is more conducive to tasks that require deep concentration; remote workers apparently make fewer errors;38 and at-home employees take fewer sick days.39 Stanford economist Bloom estimates that hybrid models can boost productivity levels by 3% to 5%.40 He cautions, however, that employers will only realize these gains under “well-organized” hybrid models in which senior leaders bring their teams together in person on “anchor” days.41 To achieve productivity gains, supervisors also need training in how best to support employees working from home.42

Talent and Office Space-Related Economic Benefits

The improved recruiting and retention and enhanced productivity advantages of hybrid models can confer substantial economic benefits on law firms. And because employees value hybrid work so highly, law firms may be able to pay their talent somewhat less than they would otherwise.43

Further, depending on how law firms implement shared space strategies under a hybrid model, there are potential savings on myriad expenses associated with maintaining a physical office. Reduced square footage and related rent, utility, and maintenance expenses can be a major source of savings.44 But substantial savings can also derive from smaller cuts (think coffee beans, photocopiers, shredding services, conference tables, artwork, and plants).45

Meeting ESG Expectations

Last, hybrid work models represent an important opportunity for law firms, like other businesses, to satisfy growing environmental, social, and governance (ESG) expectations. Businesses have been able to realize 30% reductions in their carbon footprint through hybrid work models.46 Hybrid models can yield significant ESG gains through reduced commuting and office space needs, among other considerations. Strong environmental performance can be a selling point to both new talent and potential clients as ESG expectations for law firms continue to rise.47 In a recent survey, 53% of legal industry members said their clients view environmental sustainability as very important, up from 24% in 2018.48 So gains in environmental sustainability are a valid consideration even for law firm leaders who don’t consider themselves eco-activists.

Disadvantages of Hybrid Work

Next is a look at the disadvantages of hybrid work.

Lost Professional Development Opportunities

Hands down, reduced opportunities for junior talent to learn firsthand from more seasoned professionals is the greatest disadvantage of hybrid models. Of course, the level of impairment depends on the level of hybrid work: a firm that requires four days per week in the office may see minimal professional development losses, while a firm that requires just one day per week may face substantial challenges. Overall, law firms that implement hybrid work models will find that their inexperienced talent has fewer opportunities to enjoy both informal and formal learning experiences. And these lost opportunities will slow the development of the competencies that junior lawyers need to become highly productive and trusted members of the firm.

As a backdrop to this discussion, professional development is a critical concern because law firms of all sizes—even the most profitable—had been struggling in this area well before the pandemic. The commonplace “sink-or-swim” model instituted by older generations who “figured it out on their own” was already an obsolete approach that disregarded younger generations’ demands for impactful professional development and leadership training. Unfortunately, law firm cultures have broadly failed to prioritize career advancement, while compensation models have not adequately rewarded lawyers for their training and mentoring efforts. Meanwhile, senior lawyers often lack the tools and motivation to effectively support those rookie lawyers who enter law firms unprepared for the work at hand. These issues are especially worrisome when it comes to lawyers who were law students and newer associates early in the pandemic—many of them are already struggling to produce high-quality work and earn their supervisors’ confidence because of their reduced opportunities for face-to-face learning.

Firms can pay a steep price for deficient professional development measures and unclear career advancement pathways beyond having less productive talent—lack of professional development and advancement is a key factor employees cite for leaving their jobs.49 Law firms that suffer attrition due to poor professional development models may find it prohibitively expensive to replace dissatisfied lawyers who quit. In the end, law firms that do not invest substantial time and resources into the professional development of their junior lawyers will have to contend with clients who are dissatisfied with the firm’s inability to provide top-notch, reliable legal services.

Hybrid models complicate the preexisting professional development deficiencies in several ways. The types of professional opportunities that at-home employees miss out on can range from observation of senior lawyers as they interact with clients to “water-cooler” conversations that build collegial relationships to robust training and mentoring experiences. Similarly, hybrid lawyers often have fewer professional networking opportunities outside the firm,50 which can further limit their career advancement.

Finally, employers often penalize hybrid workers, partly because of proximity bias—the tendency to favor those who are nearer physically. Studies have suggested that remote workers receive fewer promotions and raises than on-site employees,51 which may reflect that supervisors tend to “make positive snap judgments about people who work in the office.”52 This evidence indicates that hybrid models should incorporate training for supervisors in the equitable treatment of hybrid workers.

Communication/Connection Challenges

Experts have noted the risk that hybrid employees may find themselves unintentionally left out of various routine communications.53 According to a Harvard Business Review article, “Over time, as people get accustomed to who’s looped in and who’s not, they can get left out of bigger conversations and more important decisions.”54 In a similar vein, hybrid workers often report feeling socially isolated and having less positive relationships with their colleagues.55 Yet not all employees place a premium on physical connection to the workplace culture: McKinsey research finds that “only 39% of men and 34% of women who work on-site say a key benefit is feeling more connected to their organization’s culture.”56 Indeed, some research indicates that people of color may feel a stronger sense of belonging in their organizations when working from home than in the office.57 Nevertheless, it’s crucial for law firm leaders to adjust their practices and norms to ensure their hybrid model supports the healthiest possible communication patterns and workplace culture.

Finally, a consideration that’s neither a clear advantage nor disadvantage: client expectations. Experience suggests that whether lawyers work in the office or at home is generally a nonissue for clients.58 Many clients, in fact, prefer virtual meetings,59 while others remain committed to in-person meetings.60 Satisfying client preferences as to hybrid models will require firms to identify each client’s expectations and then adjust accordingly, while also ensuring use of high-quality remote technologies.

Recommendations

Hybrid work is here to stay, and for many good reasons—yet it is not without its challenges. How can Colorado law firms make the most of hybrid work while mitigating the business risks? As they confront urgent labor market pressures, firms should prioritize five key areas for smart growth to ensure their hybrid models foster a magnetic workplace culture that successfully attracts, develops, and retains productive lawyers and nonlawyer staff.

Enhancing Professional Development

Even before COVID-19, law firms were generally not known for having effective professional development strategies. Under the new paradigm of hybrid work, there are fewer opportunities for in-person connection and, while posing challenges for all inexperienced lawyers, hybrid work is most likely to disadvantage women and people of color. Accordingly, as the profession increasingly depends on younger, female talent, law firm leaders should embrace highly intentional approaches to professional development and invest substantial time and other resources in these strategies.

Law firms face a broad, difficult task—to reimagine their professional development, career advancement, and compensation systems from the top down to ensure that all lawyers develop the skills they need to excel. The new era of hybrid work (and talent shortages) calls for firm leaders to make all key business decisions with an eye to advancing professional development. In part, this means reinvesting in proven professional development strategies, such as providing newer lawyers with personalized attention to learning, offering them ample opportunities to interact with clients and veteran lawyers, and training all supervisors in effective techniques for supporting those under their tutelage.61

To account for the new hybrid paradigm, however, further adjustments are also in order. To reduce the potential for proximity bias and avoid unwitting preferential treatment for in-office professionals, standards for both career advancement and compensation within the junior ranks should largely depend on performance-based measures. Further, promotion and compensation criteria for more senior lawyers not only should depend on their billable hours and the cash receipts attributable to their clients, but also should meaningfully incentivize the investment of their nonbillable time in growing newer talent’s business acumen and overall contributions to the enterprise. And professional development initiatives should pay close attention to the population of female lawyers and lawyers from other diverse backgrounds who have struggled the most to progress within law firms in the face of long-standing biases.

One of the key emerging strategies for fostering professional development in a hybrid model is setting anchor days when all staff are normally expected to be in the office.62 For many firms, a Tuesday-Wednesday-Thursday in-office schedule makes sense. On these days, supervisors can hold team meetings and invite younger lawyers to learning opportunities best conducted in person; these are also suitable occasions for trainings, CLEs, and social events. When implementing anchor day strategies, it’s crucial to ensure that senior talent is, in fact, in the office to ensure learning opportunities are available for junior talent.

In a hybrid setting, the purposeful design and execution of mentoring programs and sponsoring programs (in which more senior lawyers champion the career advancement of junior lawyers) is especially important. It is critical for less experienced lawyers to have allies within the firm’s highest ranks—and for the newer lawyers themselves to be thoughtful and proactive in those essential relationships.63 Mentoring and sponsoring program participants should commit to a regular meeting schedule to maintain trust and lines of communication. Some meetings can occur effectively by phone or video, but in-person contact—both scheduled and impromptu—is invaluable. And identifying expectations for the relationship at the outset can help overcome potential friction and uncertainty that could deter junior professionals from reaching out to their mentor or sponsor.64

Last, inexperienced talent should embrace their own roles and responsibilities in their professional growth journey, particularly if they spend reduced time in the office. This may involve scheduling time to meet with more experienced colleagues, diligently seeking feedback on their work, adhering to a yearly plan for meeting professional growth goals,65 and purposefully cultivating relationships with members of the broader legal, business, and civic communities. No amount of professional development efforts on the part of firms can make up for a lack of personal investment by junior lawyers in furthering their own careers.

Cultivating a Communicative Culture

The fundamentals of communication and team building are more important than ever as law firms turn to hybrid models. For example, law firm leaders should emphasize the importance of regular communication and institute clear and fair expectations for professional conduct, whether in the office or at home.

In a hybrid environment, smart choices in selecting appropriate communication tools can promote productive discussion and decision-making. Research shows, for instance, that meetings with just a handful of participants work quite efficiently by videoconference while obviating expenditures of travel time.66 Meetings with many participants, however, are less effective by video because it is difficult to see everyone on the screen and “stilted” conversations result from the need to mute and unmute.67 Further, discussions that are complex or address sensitive topics may be best suited to “rich media,” such as face-to-face meetings or possibly videoconferencing, while housekeeping matters are appropriate for efficient handling via “lean media” like email or even text messages.68 Unfortunately, employees too often default to their personal media preferences without carefully considering the best method to use under the circumstances. They should be directed instead to purposefully select the tool most appropriate to the situation.

In setting hybrid communication norms, law firm leaders should remain attuned to the possibility of miscommunication and inadvertent exclusion of hybrid employees. Thoughtful communication practices can foster inclusion and minimize misunderstandings. For instance, meeting leaders can help put remote meeting participants on an equal footing by asking them to speak first.69 Leaders should also recognize that some employees are uncomfortable speaking up remotely,70 which is to be expected given the challenges with reading social cues online. And supervisors should recognize the distinct characteristics of the employees they oversee, for example, by proactively navigating different time zones and personal issues that can crop up during online work sessions.71

To cultivate a magnetic workplace culture in a hybrid model, healthy communication practices are not enough. Firms should redouble their efforts to provide opportunities for social and professional engagement among all levels of talent, both online and at the office, and ensure the workplace culture fosters genuine belonging and inclusion among lawyers of all demographic stripes. According to surveys, the opportunity to work and socialize in person with colleagues is the top reason employees are drawn to the office.72 Accordingly, anchor days are important not only for professional development purposes but also for ensuring that employees can make the in-person connections that support well-being.

Office Space Solutions

Law firms’ decisions about the physical design of their offices and how they place their employees in the available space can play a large role in the success of a hybrid model.

Law firms are now rethinking the traditional assumption that lawyers must have their own offices and that top partners will earn coveted corner offices. As of March 2023, most law firms’ occupancy rates were below 50%.73 With fewer staff on-site, many firms are downsizing their space,74 which not only saves on real estate-related costs but also helps create offices that feel busier, more vibrant, and more welcoming.

Downsizing has offered many law firms the opportunity to broadly reimagine their physical space. In doing so, firms may choose to focus their resources on creating places where employees feel comfortable gathering and where they are likely to cross paths within the office.75 Inviting common areas can encourage employees to spend time in shared spaces, thereby upping the opportunities for chance encounters and facilitating conversations. In addition, the trend toward modular office space design will allow firms to rearrange future office configurations at relatively low cost.76

To make efficient use of limited office space, firms have adopted approaches that include shared workstations, hoteling (reserving office workspaces in advance for a certain period), and hot-desking (using available workspaces on demand). Some firms award permanent offices to lawyers who agree to spend a certain number of days in the office (e.g., four days per week), but even those private offices are often smaller than in the past.77 Firm leaders are also using the shift toward hybrid work to reexamine other long-standing assumptions about office arrangements, such as the belief that all lawyers in a practice group should sit near each other.78 As firms explore new business models to stay ahead of the mounting pressures on the business of law, shared space approaches should be thoughtfully implemented to provide a streamlined and welcoming experience,79 thus encouraging in-office work and bolstering job satisfaction and productivity.

Technology Solutions

Technology can make or break hybrid work models. Cutting-edge technology has a huge potential upside for engaging with off-site talent and enabling strong collaboration and communication both within a firm and with clients, many of whom are themselves going remote. Meanwhile, negative technology experiences can degrade job satisfaction and repel younger workers, who tend to highly value top-notch technology.

A variety of smart technologies exist today that can support hybrid teams, ranging from digital whiteboards to document collaboration software to project management platforms to shared digital spaces for mentoring relationships. Creative options for solving hybrid work challenges abound. As but one example, a New York Times article cited the Gatheround videoconferencing platform for its ability to cut meeting participants off if they’ve spoken too long.80 In the future, advanced virtual and augmented reality technology will likely bring together remote and on-site professionals in a more comfortable fashion.81 And experts predict that videoconferencing will create a more satisfying user experience with the advent of platforms that more effectively use multiple cameras and AI.82

Future advancements aside, research suggests that law firms are not fully committed to using the technologies available today to facilitate hybrid/remote work. Many law firms do not have technology tools in place that are designed to support hybrid work, even though a large majority of lawyers report that such tools are important to them.83 Failing to invest in high-quality hybrid work technologies is a shortsighted decision that will not only forego increased productivity gains but also risk talent defections.

In selecting and implementing technologies to support hybrid work, firms naturally must consider the needs of their specific teams. A low-cost trial period may be a smart way to test whether candidate technologies are a good fit.84 Whatever firms settle on, it’s critical to properly train all lawyers and staff to ensure they are using the technologies to their highest potential and to provide support services capable of rapidly solving information technology problems.85 And of course, firms must stay vigilant about security risks to ensure the safety and confidentiality of networks and devices.86

Embracing a Continuous Learning Approach

Ultimately, law firm leaders should adopt a continuous learning approach—seeking to learn, grow, and invest in the smart growth of the firm every day—as they implement the recommendations for hybrid work models discussed above. The needs of law firms and their talent can be expected to evolve as the labor market and workplace trends continue to shift. Accordingly, in the words of McKinsey, “a test-and-learn mentality and a spirit of co-creation with employees are critical to getting these changes right.”87 Law firm leaders will be well served by adopting an iterative approach to hybrid models and demonstrating a genuine commitment to embracing changes, acknowledging missteps, and making course corrections as needed. This approach should be informed by a deliberate analysis of whether the hybrid model is effectively advancing the firm’s and its talent’s priorities through open and honest dialogue firmwide and anonymous employee surveys.88

Conclusion

In the current labor market, Colorado law firms can ill afford to disregard their talent’s demands for hybrid work options, especially given the expectations of younger professionals, women, and other people of diverse backgrounds who represent an increasing share of the legal talent pool. Hybrid work models, when implemented thoughtfully, carry many advantages in terms of talent retention, productivity, well-being, and more. The disadvantages are comparatively few, but reduced opportunities for professional development are obstacles that require sustained investments of time, energy, and other resources to achieve the desired benefits of hybrid work. Strategies for adjusting to hybrid models should include doubling down on investments in professional development to mitigate the risks posed by the mix of failed talent development strategies and the challenges of hybrid work. Successfully navigating modern hybrid models is a critical piece of the puzzle for Colorado law firms as they implement smart growth strategies to confront shifting labor trends and position themselves for sustained prosperity.

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