Pricing pressure and operational efficiency are among the top concerns for law firms today, according to a recent study released by Aderant, a provider of business management software for lawyers.
Law firms, big and small, are encountering intense competition from new and traditional sources, including clients, which have taken more work in-house during the last few years. Online legal service providers like LegalZoom are also putting pressure on law firms to provide high-quality work more efficiently.
Additional challenges that law firms reported were winning new business, growing existing business and improving law firm agility and adaptability.
“Many of the challenges facing law firms are interdependent — pricing and growth in a competitive environment are related to a firm’s capacity to efficiently deliver quality legal services,” said Chris Cartrett, Aderant executive vice president. “These challenges are the driving forces behind the evolution of the agile law firm, which means building the capacity to meet dynamic client demands without stressing internal systems.”
But where there are challenges, there is opportunity. By utilizing existing and innovative technologies, law firms are hoping to reach more clients, set reasonable fees and increase profits.
74% of respondents said automating manual tasks is the tech concept with the greatest upside.
Of the 112 law firm respondents, 66 percent reported they used document management software, 52 percent used some form of financial software, 49 percent used business intelligence, 47 percent used pricing software and another 47 percent used case management software. Other digital tools that law firms use include project management, customer relationship management, document assembly and e-discovery software.
Still, the technology that exists in law firms today is not enough to keep pace with client demands of tomorrow. Law firms reported that automation and analytics will be key to meeting client needs in the future.
Technology creates efficiencies that benefit both client and firm.
“Too much time is spent on rote tasks,” wrote one survey respondent. Another respondent wrote, “Workflow takes out the human component of trying to remember what to do when a certain something happens.” “Technology assists both clients and the firm, saving time, creating efficiencies to benefit both client and firm,” wrote a third.
Technology that automates manual tasks such as workflow or task flow presents the greatest opportunity to increase operational efficiency, according to 74 percent of respondents. Another 60 percent said that incorporating analytics and business intelligence would also help their firms remain competitive. Other technologies that respondents said would drive the most efficiency included collaborative tools, mobile access and cloud-based solutions.
Security issues pose a challenge to the adoption of new technologies, however. Most law firms, 73 percent, reported that cybersecurity issues were preventing their firms from adopting technologies. Law firms are also hesitant to adopt these technologies due to client concerns and integration issues.
And, of course, there is the issue of cost.
Regardless of these concerns, the use of cloud computing and new software will probably be driven by potential profit and efficiency gains, rather than cost savings, according to the Aderant survey.
