According to a survey carried out by Smith and Williamson in 2017, of the three biggest challenges facing UK law firms, the second biggest was the adoption of new technologies.
Now more than ever, legal firms have to adapt and innovate. Although more reflecting the situation in the United States, a report by Thomson Reuters in conjunction with Georgetown University as reported in Raconteur, compared “law firms’ attitude to change with that of the creators of the Maginot Line”.
They went on to say that “(f)lat demand for law firm services, declining profit margins, weakening collections, falling productivity, and loss of market share to alternative legal service providers and others are gradually undermining the foundations of firm profitability.”
A market in the midst of major change
The same report stated that the sector is under attack from the big accountancy firms which are now offering many of the day-to-day services associated with medium-to-large legal firms at substantially lower prices. Cited as an example was PwC launching a flat-fee employment law service for £250 a month for companies with fewer than 100 staff.
It was legal firms’ attitudes to technology that was likely to “become a differentiator. If a firm gets its strategy right in this area, then it will gain a competitive advantage”, according to strategy consultant Richard Tromans.
In a separate survey (again US-based), legal market experts Acritas stated that 69% of corporate legal departments said that there has been no innovation in the last 12 months by their law firms or legal service providers.
How can legal firms respond?
There are many innovative products and services being developed by suppliers for legal firms. And more and more practices and chambers are beginning to deploy this innovation.
Engagement is one major area. Increasing numbers of firms are using their client databases (particularly B2B) to communicate regularly with newsletters containing links to rich content on their websites.
The likely impact on direct marketing caused by the introduction of GDPR will force firms to become more creative with their marcomms by utilising the public square feel offered by social media platforms, particularly LinkedIn, Twitter, and Facebook.
In the event of an emergency or a crisis, C-level members, business directors, and consumers turn to the institutions and companies in which they have developed faith. Providing a continual rich stream of relevant content will build the size of this pool of these future clients over the medium- and long-term.
Engagement will also take the form of automated chat terminals on legal firms’ websites and on social media platforms. Given the complex and often individual characteristics of each enquiry, the level of automation is not likely to reach that of a mobile phone repair shop, for example. However, enquirers report increasing levels of satisfaction from this automated chat technology as they are provided with the answers they want from the large database of pre-programmed questions that can be matched to an enquirer’s actual query which are then followed by relevant and helpful replies (in the vast majority of cases).
Document automation continues to develop quickly and offer legal firms the chance to cut down on their often substantial fixed costs as the technology begins to provide outcomes similar to that delivered by a human.
Document automation allows the creation of templates for almost every type of legal agreement. This technology allows solicitors and barristers to amend the content of each template to suit the case they’re working on. During this time, the connectivity of document automation platforms allows continual and in-the-background updating of each template to cope with legislative changes.
GDPR will encourage the ongoing adoption of agile working, and enhanced data protection.
We’ve all seen how much more we’re leaving the office to visit clients than was the case 20 or 30 years ago. More peripatetic workforces need access to data on the move so that they can keep clients up to date with the progression of their cases. Legal professionals need access to that information at the office, at our clients’ premises, on the road, on the train, and even at home. Agile, on-the-move working allows law firms to become much more responsive to the needs of their clients.
However, with the need to be able to access information wherever we are, enhanced data protection is needed to protect the information firms have stored in case of accidental loss or a malicious cyberattack. Cloud technology will become essential in the delivery of data to wherever it’s needed. As a side benefit, cloud technology will also make disaster planning and disaster recovery a lot quicker to implement if and when it is needed.
Be curious for your firm
SproutIT, the legal IT specialists, works with solicitors’ practices and barristers’ chambers on their IT and networking systems with a sharp focus on improved work practices, greater security, and increased efficiency.