LexisNexis Legal & Professional has released its latest annual Bellwether report, which reveals that for the vast majority of small law firms and solo practitioners, keeping their technology infrastructure up to date over the next year is regarded as key challenge.
The Bellwether report, now in its 11th year and this year called Bold Ambitions? reveals that 81% of law firms believe that keeping their working practices and systems up to date will be difficult in the next 12 months. Only 24% of respondents said they have any actual plans to implement new technology during this period.
Other key findings of the report include:
- Client-facing online portals for matter updates most commonly cited for tech investment in next 12 months.
- 24% of respondents would currently consider using open AI sources instead of paid, while 25% wouldn’t consider it. 51% seem unsure.
- 71% of respondents have CRM and matter/case management tools. 67% use free or paid legal research tools; and just under two-thirds (64%) use legal guidance tools.
“The previous Bellwether surveyed the legal market during the post-lockdown legal boom and prior to the cost-of-living crisis, so this shift in sentiment is understandable,” said Debbie Sumner, Go-to-Market consultant at LexisNexis. “Organically growing revenue will be the theme of the year for many firms.”
When it comes to achieving growth, the Bellwether report reveals that most firms hope to acquire new clients and increase their business with existing clients. Only 13% of respondents said they plan to grow through mergers or acquisitions, a drop from 16% in 2022 and 15% in 2021. 81% said that attracting new business is going to be one of their top challenges.
This focus on organic growth is reflected in firms’ investment priorities. In 2022, only 24% of firms planned to increase investment in their marketing. In 2023, a majority of 81% of firms said they now plan to increase investment in marketing and 88% in business development. The results suggest that a strategy of retention is sensible. 88% felt that their firm enabled them to offer a good service to clients – which might help to balance the fact that 79% of respondents were concerned about client retention.
It is this investment in business development that Lexis concludes comes at the cost of implementing new technologies to improve the lawyer and client experience. As above, 24% plan to implement new technology over the next 12 months, choosing to maintain systems rather than upgrade. Yet – a desire for legal intelligence technology was strong, with two-thirds making use of free and paid digital legal research tools and legal practical guidance.
The Bellwether report can be accessed here, although it is behind a paywall. https://www.lexisnexis.co.uk/insights/bellwether-2023-bold-ambitions/index.html