Keeping up with the competition in challenging times

Economic uncertainties and the cost-of-living crisis aren’t showing signs of abating in 2024. Seeking higher pay, lawyers are changing employers while others are weighing up their flexible working options — leading to fierce talent competition. Find out more in this legal sector trends report by Advanced.

2023 was something of a bumpy ride for many law firms and economic challenges and uncertainties seem likely to continue through 2024 too. There is little sign that the cost-of-living crisis that has impacted many this year is coming to an end. Rising costs have affected all businesses, including those in the legal sector and many employees are struggling too. For some, seeking a new employer for better pay has been the answer. Others are weighing up benefits that include having more flexible working opportunities that can help to alleviate other pressures in their lives such as childcare, or reduce the time wasted in their daily commute, and the competition for talent has been acute.

Law firms are operating in a more competitive landscape generally, as the Big Four (Deloitte, EY, KPMG, and PwC) and other combined legal/accountancy/professional services businesses are able to use economies of scale alongside the convenience of a one-stop shop to lure clients away from legal specialists.

Artificial Intelligence (AI) is a new threat to those aligned with more traditional legal processes. The firms that are already implementing AI are using it for day- to-day work and may be able to reduce fee-earner hours spent on a project, reducing costs and previous standard fees to clients, The ‘Amazon effect’ that dominated retail and other product/service procurement during the pandemic has left its mark as customers want more, for less, and faster.

Clients are becoming more demanding, expecting firms to provide 24/7 access, with swift responses and communication processes as well as competitive fees. This phenomenon is affecting many sectors in the UK economy, but when compared to other UK business sectors, some law firms are behind the curve in digital adoption, missing out on the benefits experienced by more digitally-savvy competitors.

Now is the time for all UK law firms to accelerate their digital transformation, adopting new and powerful technology that can drive greater efficiency, productivity, and growth to ensure a brighter 2024 and beyond.