1. Integrating legal software
Integrating law firm software and systems is not a new challenge for the sector however it’s one that’s becoming increasingly more important as law firms strive for increased profitability while improving client service and experience. Many firms have disparate systems being used across their firm which don’t share data with one another, leading to inefficiencies and problems, from manual data entry and poor data quality to cyber security and reduced automation. To operate efficiently, firms could encourage more collaborative working between teams and the foundations of this stems from the systems being used. Integrating legal accounts, CRM, HR, case management and more, creates an digital ecosystem which can better manage workload and client engagements.
For more information around this and details on the opportunities which can be realised, view our recently published article ‘Is fully integrated software for law firms better than separate software packages?’.
2. Will the conveyancing market have fewer transactions?
After the rollercoaster ride of 2021 (due to COVID-19), where we saw over a million residential purchases, the conveyancing sector returned to ‘normality’ in 2022. Though, there was a noticeable drop of 23% in transactions compared to the year before. This slowdown is largely due to interest rates hitting their highest levels since 2008, with average mortgage rates around 5.35% for two-year deals and 4.85% for five-year deals.
Add to that the high property prices (though they're expected to fall by about 5%) and the rising cost of living, and you've got a market that’s slowing down. This means less demand for houses and fewer clients knocking on conveyancers' doors. Whilecompeting with other firms will be a challenge, some argue this is a welcome period of calm for conveyancers who have been overworked the last two years.
This levelling out in demand gives conveyancers a chance to get back to basics and gives an opportunity to focus on giving clients better experiences, refining their digital journey, and generally improving processes before the market picks up again. Our article on Modernising the conveyancing process dives into ways conveyancers can step up their game, making things smoother and more satisfying for our clients as we gear up for whatever comes next.
3. What impact is the economy going to place on legal firms?
The UK economic landscape in 2024 remains turbulent, primarily due to the aftermath of the Ukraine invasion and ongoing geopolitical tensions. This environment has led to increased interest rates and living expenses, prompting clients to buckle down on their choice of law firms based on pricing.
According to a survey involving 200 partners, 44% of firms are experiencing pressure from clients to lower fees amidst rising costs, while 46% noted clients shifting towards more affordable competitors. In response to these challenges, firms are compelled to take a closer look at their operations to enhance efficiency and cut costs.
Also, stringent measures for anti-money laundering (AML) and source of funds continue to be essential, particularly with the ban on transactional work for Russian clients affecting various legal sectors, notably conveyancing.
Cybersecurity has also emerged as a critical concern, with IT professionals highlighting the heightened risk of cyber-attacks. Despite the prevalence of such threats, a surprising 35% of firms have yet to implement effective cyber mitigation strategies. For insights on addressing this issue, our blog on cyber threats in 2024 offers valuable recommendations.
Amidst these economic challenges, there are opportunities for law firms to thrive. By optimising operational processes and leveraging technology, firms can enhance efficiency and minimise cost wastage. Integration of case management systems with internal functions like legal accounting and online payments, as well as external services such as government portals and identity verification, can deliver significant value to both firms and clients.
Additionally, transitioning to a hosted environment can offer enhanced security and performance benefits, as discussed in our blog covering hosting options for legal practice management software.
4. How can law firms build a positive culture while remote working?
Attracting and retaining talent within the legal sector will remain a major hurdle in 2024, especially with the changes brought by the flexible working act in April. The pressures of the cost of living also contribute to the challenge, as legal professionals contemplate job moves to secure higher salaries, while the option of remote work offers increased flexibility and access to job opportunities.
While remote work presents numerous advantages such as improved work-life balance, lower office expenses, and access to a wider talent pool, it also brings its own set of challenges. Maintaining a positive work culture and keeping employees engaged with the firm's values can be difficult when working remotely. Many individuals working from home, often in isolation, may struggle to feel connected with their colleagues, which can impact collaboration and overall wellbeing.
However, there are opportunities for firms to nurture a thriving remote work environment. Firstly, effective communication strategies both internally and with clients are crucial to establish clear norms and reduce unnecessary interruptions. Sharing best practices, setting expectations for response times, and establishing email protocols can streamline communication and prevent message overload.
Additionally, human resources teams can play a key role in reinforcing the firm's values, celebrating achievements, and gathering feedback to enhance the remote work experience for employees. Leveraging technology is also essential to support remote work effectively and securely. Providing necessary hardware and software tools, such as laptops, communication platforms, and cybersecurity measures, can facilitate a smooth transition from the office to remote work. This is where a browser-based or cloud hosted legal case management software is worth its weight in gold!
At our Access All Areas Virtual Conference, we ran a legal CPD accredited panel discussion with industry experts titled How to attract and retain the best talent while building a positive culture which covers this topic in more detail and provides some great tips and case studies to support your firm.
5. How can law firms drive more new business?
We finish this article with one of the age old challenges for law firms and one that has continued prominence this year, how can law firms drive new business and be more competitive. With client’s sensitivity to price and more legal services being made available online, providing more choice for consumers, competition in the sector is growing and it’s difficult for firms to stand out. It’s not always sustainable or appropriate to cut price to be the cheapest therefore firms need to consider other ways to differentiate themselves. Another challenge is that lawyers, solicitors and fee earners are legally trained, not sales or marketing trained, so potentially lack some of the skills required to engage prospects and follow up with potential opportunities.
There are some quick wins to help surface new opportunities. One is ensuring you have an automated online quotation tool which allows prospects to receive an estimate anytime they want and you capture contact information to follow-up. Better still, if you can integrate the quotation tool with your case management system, details can be passed directly into a case file, saving time and improving accuracy, and the person responsible for following up can do so in a timely manner. Other useful activities include attending local community events to network and build your profile, utilising marketing initiatives, such as social media and email marketing, and collating positive feedback from existing clients to evidence the value your firm can provide.
We’ve created an article, Law Firm Marketing: 7 Top Tips to Market your Firm, which provides some really simple tips to support your business development.
[1] https://www.forbes.com/uk/advisor/mortgages/mortgage-rates-20-12-22/
[2] https://www.reuters.com/world/uk/uks-nationwide-sees-5-house-price-fall-2023-2022-12-20/
[5] https://www.ncsc.gov.uk/news/organisations-urged-to-bolster-defences