The firm also unveiled a “first-of-its-kind” partnership model in August this year, before announcing to the market that its proposed merger with GTC Legal Group — which was supposed to be a “seminal moment for the personal legal services industry” — was being terminated in November.

Following a mammoth 2022 — and a “record” financial performance — for the firm, Mr Dearlove spoke to Lawyers Weekly about AFL’s priorities moving into 2023 and revealed some of the issues smaller firms may face.

“Our future priorities are robust and ambitious and focus on growth, which falls within our three-year strategy — or ‘AFL:3.0’. Our main priority is organic growth through our digital and referral model, growing our new regional partnership model building on our 20 strong office base and the development of our leading lawyers to allow further capacity to service more clients,” he explained.

“2023 will see AFL capitalise on the investments we’ve made over the last three years and grow our firm of 20 offices by another five new locations. This will better position us to elevate more of our lawyers to higher roles, as we consider leadership a key ingredient of our success. We will continue our digital growth to help more Australians, which will include the launch of a publication on relationships in Australia and where they are going from a legal perspective.”

The firm also learnt a number of “invaluable” lessons emerging from the pandemic.

“One of the biggest lessons AFL learned over the past 18 months is that every business needs a scalable and efficient plan in place. We have always focused on NewLaw models and have invested in ‘thinking different’. We now have scale as the largest family law firm in Australia, and we need to use that scale to grow and help more Australians. The pandemic has not changed our strategy, it has instead created opportunities,” Mr Dearlove added.

“As we exit the worst of the pandemic, lessons learned in times such as this are invaluable. As a result, we will focus on building a high-performing culture in line with a return to the office. We will focus on balancing a working-from-home model and encourage a new energy of people finally coming back together. This will go hand-in-hand with our partnership model — financially partnering with other lawyers and firms for mutual growth.”

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A major constraint within the legal profession moving forward, however, is a “lack of investment” in legal professionals, Mr Dearlove noted.

“There are many lawyers matriculating from universities, but unfortunately for some, a law degree does not translate into quality or skill. The decline in talent is exacerbated by the migration of younger lawyers overseas post-COVID-19, which will create further workforce pressures,” he said.

“Competition for clients is fierce in the industry, which is further fuelled by changing client expectations. Like the cost of living, the cost of doing business has likewise increased, which is putting pressure on firms to meet the demands of potential clients. What we need to remember is that pricing and management of law firms is a key to success, and as lawyers, we need to remain relevant to clients in the face of alternative legal providers.”

And according to Mr Dearlove, these issues have also impacted smaller firms, too.

“The pace of change and environmental factors in the sector is driving law firm owners to look at alternate opportunities to overcome these challenges, and I believe that we will see smaller businesses co-operating and consolidating with larger firms to share the load, as the initial wave of challenges continues to grow,” he explained.

“Smaller law firms continue to occupy the most dynamic position in the industry, as they’re more dependent on continuity of client acquisition compared to their larger counterparts, and this means they feel the impact of fee pressures from clients and labour shortages more significantly. This will be aggravated by a rising divide in generational mindsets in the workforce which is a major trend sweeping across the industry currently.

“The notion of a work/life balance and what that means for different people is creating a growing consideration for small and large firm owners to meet the needs of both employees and clients alike.”

And moving forward, the skills shortage is likely to continue to impact firms, as well as potential trends overseas making their way to Australian shores.

“The most pressing challenge facing the law sector and us this year was a shortage of skills and labour. With many workplaces under enormous strain, it somewhat placed a handbrake on economic growth. We have faced skills and labour shortages during previous economic cycles but never so acutely as now due to the impact of the pandemic. Unfortunately, I don’t see this issue being overcome just yet,” Mr Dearlove concluded.

“The outsourcing model that is starting to make waves in the UK is seeing more and more firms making use of independent contractors as an easier, speedier alternative to taking on full-time, permanent hires. Lawyers work for themselves, can have more control over their workload and clientele, and firms are able to manage their labour shortages in the short term. This will be an interesting shift in dynamics if this trend reaches Australia as to how firms will adapt and flex.”