1. Economic pressures
The UK economy continues to face significant challenges in 2025, with rising interest rates, inflation, and economic uncertainty making clients even more price conscious when choosing a law firm.
As firms grapple with rising operational costs and demands for more efficient services, technology adoption—especially AI-powered solutions—will be crucial to streamline operations, reduce costs, and meet evolving client expectations.
At the same time, continued stringent checks for anti-money laundering (AML) and source of funds are needed along with greater cyber security and verifications for online activity as IT professionals are wary of increased risks of cyber-attacks. In 2024, cyber attacks on law firms jumped by 77% over the past year, highlighting the very real threat. Though, surprisingly, 35% of firms are yet to implement effective cyber mitigation strategies as reported in the SRA’s 2023 legal cyber security report. Our blog on cyber threats in 2025 delves into what firms can do to mitigate the risk of cyberattacks.
There are opportunities for law firms amongst the economic pressures.
The need to work more efficiently to increase utilisation rates and reduce wastage means firms can interrogate current processes to see where they can streamline or automate tasks.
Integrating a case management system with other internal areas, such as legal accounting, online payments and website quotation tools, and external third-party systems, such as government portals or identity verification services, for example, can provide value to firms and the end client.
In regards to increased cyber security, moving to a hosted environment can provide significant security benefits as well as performance improvements.
Our blog on the hosting options for legal practice management software covers the options available.
2. The rise of AI in legal services
AI is set to transform the legal industry even further in 2025, improving operational efficiency and client service. AI tools are automating routine tasks like document drafting and case summarisation, allowing firms to deliver faster and more accurate services. However, as AI adoption grows, so does the challenge of ensuring cyber security. Law firms must use AI responsibly, protecting sensitive client data from potential breaches.
AI is also enhancing client interactions through chatbots, predictive analytics, and AI-powered legal assistants, improving communication and service delivery. While AI can automate tasks, it cannot replace the human judgment and empathy clients rely on. In 2025, law firms should focus on leveraging AI to enhance their practice without losing the human touch.
For more insights on AI in law firms, check out our AI in the legal sector resource hub.
3. Integrating legal software
Integrating law firm software and systems is not a new challenge, but it’s increasingly important as firms strive for increased profitability while improving client service and experience.
Many firms have disparate systems that don’t share data, which can lead to inefficiencies and problems, from manual data entry and poor data quality to cybersecurity and reduced automation.
To operate efficiently, firms could encourage more collaborative working between team. The foundations of this stems from the systems being used.
Integrating legal accounts, customer relationship management (CRM), human resources (HR), case management and more creates a digital ecosystem that can better manage workload and client engagements.
We explore the opportunities that can be realised in our article: is fully integrated software better than separate software packages?
4. Building a positive remote culture
Talent attraction and retention in the legal sector will continue to be a significant challenge in 2025, particularly with the flexible working act changes in April 2024.
Cost-of-living pressures also play a role, as legal professionals consider moving jobs to increase salary, and remote working allows for greater flexibility and availability of roles.
Remote working can create challenges in maintaining or building a positive culture and keeping staff engaged with the values of the firm.
There are many benefits to remote working, including a better work-life balance for staff, reduced office overheads and attracting wider talent pool.
But being at home, often alone, means some people lose that sense of community, which makes working collaboratively with colleagues more difficult.
Some may even start to feel isolated, which can have a negative impact on wellbeing.
Looking at culture, there are opportunities for firms to foster a positive and productive remote working environment.
Firstly, communication within the firm, both internally and to clients, needs to establish norms to ensure everyone is clear.
Sharing best practices, response time and email protocols will prevent people getting too many messages, reduce interruptions and make communication easier.
HR teams can then focus on sharing content with staff which talks to the firm’s values, celebrates achievements and gathers feedback to improve their experience working from home.
The second opportunity is to leverage technology to support staff to work remotely with ease and securely.
Providing hardware – such as laptops, keyboards, mice and comfortable chairs – and appropriate software to assist communications, productivity and cybersecurity are key to making the move from the office seamless.
This is where solutions such as browser-based or cloud-hosted case management systems are worth their weight in gold!
Watch our panel discussion with industry experts titled How to attract and retain the best talent while building a positive culture which provides tips and case studies to support your firm.
5. Driving new business
An age-old challenge for law firms that has continued prominence this year is how to drive new business and be more competitive.
With client’s sensitivity to price and more legal services being made available online, competition in the sector is growing and it’s difficult for firms to stand out.
It’s not always sustainable or appropriate to cut prices to be the cheapest. Firms need to consider other ways to differentiate themselves.
Another challenge is that solicitors are legally trained, rather than trained in sales or marketing, so may 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 to leverage an automated online quotation tool that allows prospects to receive an estimate anytime they want while 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, improving accuracy and making it easier to follow up.
Other useful activities include:
- attending local community events to network and build your profile
- using marketing initiatives, such as social media and email marketing
- collating positive feedback from existing clients to evidence the value your firm provides
Explore our seven tips to market your firm, which provides advice to support your business development.
Read our extended article: The 10 Biggest Challenges Facing the Legal Profession