Legal
Drivers
All industries are being shaped by the global Megatends of Globalisation, changing Demographics, Climate change and Technology innovation. Shaped by the these trends and now the pandemic, the industry is being shaped by five major drivers:
Credibility
Law firms have always needed to demonstrate their expertise, experience and credibility to customers, but this is becoming more challenging as industries become more complex, information intensive and regulation continues to grow. aw firms will need to help their clients navigate this new world of declining trust, for example in intellectual property rights and post Brexit trade.
Clients also need confidence that law firms are acting responsibly and contributing to society in a positive way not for pure profit. Law firms will come under pressure to develop sustainability programmes.
Law firms will need to expand their to meet the needs of an expanding global middle class with growing assets. They will also need to support the legal needs of an older population. The shift in working patterns (e.g. gig economy) will also drive a need for greater more flexible legal advice.
Security
Law firms are an attractive target as they hold sensitive client information, handle significant client funds and are a key enabler in commercial and business transactions. Two in five UK businesses and one in three charities detected at least one cyberattack on their operations in the last 12 months.
Cyberattacks were up 400% a day compared to pre-COVID-19 levels.
Talent
The UK Legal sector employs over 314,000 people and research shows that 84% of UK law firms are concerned over the shortage of talent going forwards. This concern is likely to grow as competition for talent increases both inside the legal industry and as potential recruits are tempted by more “trendy” industries.
Employees now also expect more flexibility at work and access to similar digital tools that they use in personal life. More than half (52%) of employees across the UK law sector say working from home has improved their work-life balance for the better.
Innovation
Clients are looking to law firms to demonstrate innovation in how they do business. Digital technology has raised customer expectations on service levels and convenience.
New players are using technology to enter the market - such as LawTechs – and even the Big 4 accounting firms. The government is also doing business digitally including the court system.
COVID-19 has forced a shift to digital interactions and remote working that is unlikely to change in the new normal, some firms expect up to 80% of staff to permanently operate in an agile way.
Competitiveness
Clients are expecting more transparent value for money with a trend towards fixed price services, an area new entrants can target and put pressure on margins.
Law firms are looking to technology to change pricing, with 62% of expecting technology to help them shift away from the billable hour and 86% anticipating technology will deliver or at least facilitate alternative pricing arrangements.