Law Firm Challenges & Legal Tech: Where Are We?

Publicaciones del blog - 27 mayo 2021

Law firms faced immense challenges in 2020. The pandemic caused the global economy to hold its breath in the first quarter, resulting in uncertainty and pessimism for the future. It also fuelled legal customer appetite for more competitive legal fees and increased efficiency. However, fluctuating demand and increased price sensitivity did not have the negative impact on profits that law firms initially braced for.

Digitalisation in law firms is widely accepted as a driving factor behind law firm agility, profitability, and future-readiness. In fact, close to one third of lawyers surveyed by Gartner for its 2021 Legal Planning and Budgeting Report indicated that acceleration of corporate technology use was going to have the most significant impact on legal work in the coming year.

Change is Challenging Law Firms
The changes demanded of law firms during the pandemic look set to continue into the future.

  • A recent Wolters Kluwer survey report indicates that 52% of law firms will work from home more in the future. This tells us that law firms are building remote work capacity into their longer-term technology planning and will likely be rolling out more permanent work-from-home arrangements.
  • The same survey indicates that 66% of law firms are seeking to improve virtual and digital customer communications. This demonstrates that law firms imagine a future where clients attend legal offices less frequently and rely on e-meetings instead.
  • Legal customers are increasingly demanding alternative fee arrangements and unbundled services in their quest to reduce legal spend. Law firms need to work out how to remain profitable while continuing to meet client needs and demands.
  • Legal customers want efficient, cost-effective legal services and good communication from their legal providers. We wrote an eBook on the relationship between customer satisfaction, perceived value of services, and law firm profitability. You can download it here for an in-depth exploration of this topic.

Law Firms Must Innovate to Remain Competitive
These challenges all require innovation and intervention from legal technologies. In this climate, it’s unsurprising that industry expenditure on legal technology is strongly predicted to continue to increase. A 2020 Gartner survey of legal leaders predicts a threefold increase in legal technology budgets by just 2025.

Digitalisation Holds the Key to Post-Pandemic Profitability
48% of legal departments surveyed for Gartner’s 2021 Legal State of the Function asserted that technology solutions and the level of adoption was a weakness going into 2021. With legal technologies impacting everything from client payments to predicting case outcomes, law firms understand that now is the time to start adopting technologies or get left behind...