"A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” Winston Churchill
In this guide our Operations Director, Gavin Ward, outlines some of the biggest challenges that law firms will be facing now and in the coming years and some of the most cost-effective ways for the more progressive firms to beat their competitors through harnessing online strategies and technologies.
Updated April 2020 - The Coronavirus pandemic has been and will be considerably changing the way that law firms operate and the way in which clients purchase legal services in future. Now, more than ever, it is critical to leverage technology not only to survive, but to prosper. This is why we have introduced our quick set up law firm toolkit aimed squarely at the smaller end of the legal market.
Updated April 2018- see also our Emma Flood's guide: "The Future is Coming - What can the legal sector expect from technology in 2018?"
Over 10 years ago I was starting my legal traineeship. It was a time of opportunity: having come out of one of the finest law schools in the country with first class results and having secured a place at one of the most prestigious law firms in Scotland things looked promising, to say the least. Back in the 80s this would surely be a straightforward path to partnership, clients landing in your lap without you having to do much other than ‘the law’ and loads of time on the golf course during the week. Instead, 2008 was to turn out to be the start of what we now call ‘The Great Recession’ (yes, it has its own term consigned to history and thus its own Wikipedia page).
Fast forward 10 years and, having qualified as a Solicitor (back in 2010), I’m now lucky enough to be part of an exceptional team of people – lawyers, legal business development professionals, law graduates, legal marketers, digital marketers, consultants from other sectors and some of the finest technical support staff in the country – helping over 60 law firms in the UK and across the world to excel against their competition. If it hadn’t been for the recession, the sheer pressures on today’s law firms and the possibilities that exist with online technology, I’d probably still be practising as a technology solicitor, probably not making anywhere near the same impact or contribution to the legal sector, and certainly not having such a great job and doing what I love doing – helping the best law firms and lawyers to succeed through making the most out of the internet.
Legal Sector Challenges Today and for the Foreseeable Future
So what are the main difficulties and challenges modern lawyers face in the UK and beyond? And what are some of the main opportunities? Some time ago I was speaking at a Law Society of Scotland Update seminar to an audience of Scottish law firm decision-makers alongside legal rainmaker consultant Stephen Gold and my colleague and legal BD expert Chris Davidson. A significant part of the background to the discussions concerned the many current challenges in the legal sector and the following are the ones raised in my presentation (you can find the slides toward the end of this blog post):-
New types of legal service and new forms of delivery of legal services
Perhaps Tesco Law wasn’t what we all expected (perhaps more Co-Op Law or Stobart Barristers), but many serious businesses have gained ABS status and the delivery model of legal services is still in flux.
Law firm mergers
With there being so much disruption in the legal sector, mergers are inevitable; many significant law firm entities have disappeared in recent years. More mergers will happen in the UK in the next 10 years, just as they’re happening elsewhere around the world.
The demise of legal aid
Legal aid continues to get cut across the UK and is still having a significant impact, not just on certain types of legal practice but also a life-changing impact on their clients who can no longer depend on it.
Growth in outsourcing
We regularly speak to leaders in the Legal Process Outsourcing business and the potential with outsourcing of legal services is still massive. We’re seeing firms outsourcing vast amounts of work to other countries for greater efficiencies. Read more about the potential in law firms outsourcing certain types of work in Tip 10 of our insights piece on operational excellence for law firms here.
Pricing pressures with increased client demands
The hourly rate is being overtaken by smarter forms of pricing attributed to value (including for instance fixed fee for more types of legal service). During the seminar mentioned above, Stephen Gold gave a brilliant example of a £650 per hour lawyer potentially giving advice worth £100,000s to a client within one hour and having to stick to just £650 if the feeing arrangement was so inflexible.
Advocates/Barristers vs Solicitors
Advocates in Scotland and barristers in England & Wales are competing against solicitors for more types of legal work. Scotland, for instance, saw its first Chambers of Solicitor-Advocates forming (and we were privileged to be able to help them create a great online platform) (although it’s worth noting many advocates and barristers still rely on solicitors as their main source of referrals)
Referral fee bans
Particularly prevalent in the PI sector, referral fee bans have forced firms to quickly adapt their business model or lose.
There are, of course, other challenges specific to different types of legal practice and sector. This video from leading legal commentator Richard Susskind (author of the book ‘The End of Lawyers: Rethinking the nature of legal services’ and ‘Tomorrow’s Lawyers’) is particularly concise, useful and well worth the 10 minute viewing:-
What are the Opportunities for Law Firms & Lawyers?
Against this background, what can you do? As per the Churchill quote above, these challenges should be seen as great opportunities. As I mentioned during the Law Society seminar (again see slides below), there are many opportunities that modern technology, including the Internet, affords today’s modern lawyers to help them succeed.
First, though, it’s imperative to know what your firm’s goals are. Stephen Gold, who grew Golds Solicitors to over 450 people-strong, notes that everything boils down to two questions: ‘Where do we play?’ and ‘How do we win?’. In addition, ensure your fee earners are aiming to provide the best possible service to your customers. Stephen gave the example of John Lewis – how people will pay extra there because they know they’ll get a great service. Stephen made many additional insightful points and I’d strongly recommend you book yourself a place on one of his next seminars to hear it direct from the master himself.
Chris and I both discussed opportunities available via the Internet. Chris delved into what makes an effective law firm website (in particular how to turn your site into a lead-generating platform) and tips for online business development and I provided an overview of some of the best advanced LinkedIn strategies that a firm can adopt. As I noted,
“Many firms still aren’t yet harnessing the potential of online technologies to really develop their niche and grow their practices online. In an increasingly competitive marketplace, those who excel through their use of modern technology will thrive; those who don’t will be left behind.”
And this is appreciating that there's a lot more to it than what some may suggest as the misguided magic bullet of simply spending hours blogging or tweeting.
Helping Law Firms Succeed – Get in Touch Today
Overall, there are many challenges facing lawyers and law firms in modern times and no-one can be certain whether these will be the same in 2025 or indeed if we’ll have a new host of difficulties to overcome. With the shockwaves of the recession still being felt across the legal world, lawyers must continually remind themselves that this is not the time to sit back and wait to see what will happen – it’s time to make a change, to get back to business basics to some extent and to embrace modern technology to be successful.
We love speaking to lawyers about this stuff and live and breathe it every day.And we’d be happy to discuss further with you - contact us on 03333 442 722 or fill in our enquiry form.