Legal industry professionals say prospects for their future legal business look bright, but cite pricing pressures and cybersecurity as the biggest challenges their firms face, according to a recent survey published on The American Lawyer. The survey, conducted by legal software company Aderant, indicated that law firm professionals have a rosy view of their potential business. More than half of the survey’s respondents—some 57 percent—reported that business was “better” or “much better” at their law firms than it was over the prior year.
Beyond the survey’s findings about law firms’ business optimism, Aderant also asked respondents to name the most significant challenges facing their firms. According to the survey, the top five challenges facing law firms included pricing pressure, cybersecurity, operational efficiency, technology adoption and competition. Among respondents polled from US firms, cybersecurity jumped from sixth place in this survey the previous year to tie for the top spot with pricing in 2018, (as quoted in The American Lawyer).
The survey also included questions about innovation and new technology. While innovation is a hot topic in the legal industry, Aderant reported that more than 70 percent of respondents said their firm does not have anyone on staff specifically dedicated to innovation. But that response changes as law firm size grows, according to the survey. Just shy of 56 percent of respondents from firms with more than 500 lawyers said their firm had a staff member focused on innovation and new technology issues, (as quoted in The American Lawyer).
Contact Bill Sugarman for more information.
The American Lawyer reports on several key trends from this year and what we can expect for the legal industry in 2018. According to the article, key trends that we can expect to continue into 2018 include increases in law firm mergers, lateral moves within groups, and enhancements in legal technology innovation and the business operations of firms.
2017 is set to be a record year for U.S. mergers. So far this year, there have been 85 mergers and acquisitions involving U.S. law firms in 2017, according to Altman Weil data—just six shy of the all-time record, set in 2015. But while several large-scale tie-ups hit the headlines, the overwhelming majority of deals in 2017 were extremely small: Over 90 percent involved at least one firm of under 100 lawyers, while more than two-thirds were acquisitions of firms with 10 lawyers or fewer (as quoted in The American Lawyer).
Last year also saw a large number of lateral moves that involved practice groups within targeted geographic markets. “I think there’s more and more pressure to grow breadth and depth, and laterals and groups are a big part of that for many or most firms,” notes Kent Zimmermann, a consultant at The Zeughauser Group.
In 2017, law firms continued adopting legal project management techniques to get a better grip on what matters actually cost. Am Law’s article reports more firms will adopt better pricing tools; legal operations staff will gain power inside legal departments; and the traditional competition for Big Law work will be upended. That won’t happen everywhere all at once next year. But better technology will make the change begin to gather speed. “The entire industry is stuck on the billable hour because it doesn’t understand its unit costs,” says Keith Lipman, President of the legal tech company Prosperoware. “If we get to the point of managing unit cost, law firms can actually get away from the billable hour. So, the faster you collect data to understand that is critical” (as quoted in The American Lawyer).
Please contact Bill Sugarman for more information.