Time to consider the annual report

Why don’t more law firms publish interesting, informative annual reports?

The short answer is that most of them don’t have to. Unlike public companies who have shareholders and creditors, partnerships are not obliged to provide detailed financial statements or information on progress in areas such as sustainability and diversity.

But are law firms missing a marketing opportunity? An annual report can be a great way to summarise what a firm represents and what is has achieved during the past year. It can be presented to actual and potential clients; current staff and potential recruits – both junior and lateral; and made available to the media.

Some firms do publish annual reports of various types, which is welcome, but the content is often disappointing.

Take the Clifford Chance Annual Review 2022. This comprises eight pages (presented in a PDF – not helpful for phones or mobile devices). About half of it is dry financial information. Just one page is devoted to “Selected highlights from the past year”. This comprises six bullet points and a lot of white space. One of the “highlights” is the closure of the Moscow office.

Hogan Lovells’ announcement of its 2023 financial results has the advantage of keeping the numbers brief, and including some examples of client matters, with a focus on ESG, DEI and pro bono work. But the only person mentioned or pictured is CEO Miguel Zaldivar, and the document doesn’t convey any warmth or personality.

Some firms produce reports on dedicated topics. For example, Baker McKenzie published a comprehensive Sustainability Report 2024 and an Inclusion Diversity and Equity Annual Report 2024. While both these include valuable stories and data, they are oddly inconsistent in format and style – the DEI report is much more dynamic and interactive. Why not incorporate some of the material from the two reports into a broader and more accessible report alongside other relevant information?

One firm that has clearly put some work into compiling its Annual Report 2023 is Gibson Dunn. Over more than 40 pages (this is another PDF), it includes work highlights, accolades, partner promotions and hires as well as sections on diversity and pro bono work. It also has stock photos – lots of stock photos – of mountains, clouds and roads. But it’s another missed opportunity. Why not include some pictures of the new partners, and interviews rather than the usual bland bios? Or a testimonial from some of the clients mentioned? Or, dare we say, a video or infographic to liven things up a bit?

Many law firms would say that the sort of information that you need to include in an annual report takes time to put together and that time is better spent on other things. They might add that some details about cases and deals are confidential or need client approval. And that things such as recruitment priorities and revenues may not be topics that one really wants to mention in public.

That’s understandable, but we know that law firms are compiling this sort of information anyway for pitches to prospective clients, to recruit trainees and for submissions to directories. In fact, law firms are comfortable sending extensive details of clients, matters and much more to directory publishers, even though they have little or no control over how it will be used.

So why not invest a little bit of effort in preparing an attractive annual report, with the key data from the past year, some case studies of achievements, quotes or interviews about areas of focus, and some nice photos, videos or other illustrations. Put it on a dedicated page on the website (not a PDF please) that’s easy to navigate and interesting to read. You can then leave the report in place for a year and direct potential clients, recruits or foreign associates to the page – potentially saving time and money on compiling the information afresh every time you need it.

In short, take a look at what public companies do, or even better learn from other professional service providers (such as PwC and Deloitte). If you want to succeed against your competitors, providing accessible, thorough and relevant information is vital – and what better way to do that than in a comprehensive annual report.

If you would like to discuss what makes for a good annual report and how to go about compiling one, please speak to your usual Lextel contact or email Mak Mengal.