Is a more turbulent, competitive legal market driving leaders of midsize law firms to focus on process improvement and investing in transformation?
That is a key question posed by SaaS practice management system vendor Actionstep in an in-depth benchmarking report out next week, which gathered the perspectives of 60 law firm leaders at firms ranging from 20 to 500 people.
The report looks at questions that will define the success of midsize firms in 2025, including what their top investment priorities and plans for improvement are; where they are taking action to improve client experience and service; and how they are taking advantage of technology to become more efficient, productive and profitable. The report also looks at what their biggest challenges are in terms of risk management and cybersecurity.
Top priorities and challenges
Interestingly, amid a myriad of competing business priorities, leaders at midsized law firms are most focused on employing and retaining top talent, with their traditional work-life-balance draw having been squeezed by more attractive post-pandemic working patterns at larger law firms.
The report defines firms of 100 employees and below as smaller midsize law firms, and above 100 as larger midsize firms, and you can see in the chart below, recruiting and retaining talent is a top priority for both of those groups, closely followed by attracting new clients.
Interestingly, digital transformation and technology is cited as a top priority by less than a third of both groups.
Tim Farnfield, operations director at Redkite Law, which has a 200-300 people headcount, comments: “Recruitment is indeed hard in the current market. In several areas my firm is looking to reduce the volume of work that’s coming in as we couldn’t service more properly at present. Availability of talent affects a law firm’s ability to grow at speed.”
For Farnfield, more technology isn’t necessarily the answer though, or at least not yet. He says: “The solution that suits a firm of our size doesn’t appear to be there. We’re larger than a small operation, but without the size of an IT team needed to develop and nuance something to work perfectly. A lot of technology options are either too generic or too expensive. The impact of undertaking a three-year project to produce something that works isn’t worth the risk — and that’s on top of the time it can take to persuade people to adopt tools as they should.”
While firms recognise the need to create efficiencies in client services and invest in a more sophisticated digital experience, time and resource is an enduring challenge. Sarah Charlton, CEO at Eaton-Evans & Morris in Wales (headcount 20-50), points out that it can be difficult for smaller midsize firms to align the availability of the firm’s leadership or management capacity for any transformation at the time when it’s most needed. Strategic bandwidths are typically more stretched in leaner operations and people are required to juggle multiple areas of focus. It’s also likely there will be less subject matter expertise on hand: “Smaller law firms regularly rely on people to come out of their main lanes and embrace versatility,” she says.
This may go some way towards explaining why less than 25% of leaders of midsized law firms rate the digital experience they provide clients as good or excellent, compared with, for example, 90% who say they provide clients with peace of mind.
Level of IT adoption, from automation to AI
While more than half of midsized law firms are using process automation to manage and streamline their workloads, the adoption of AI is, as yet, perhaps unsurprisingly minimal.
Sean Stuttaford, CEO at Thompson Smith & Puxon, highlights the complexity of tech adoption in law firms, commenting: “There isn’t a one-size-fits all when it comes to law firms and technology — some areas might well be woefully lacking, but making the right decisions and investments depends on a combination of client expectation, the importance of personal touch, and work complexity.”
He adds: “Midsize firms don’t have the financial firepower to compete by automating everything — and if everyone uses the same tools the risk is that they all become the same, and then it’s a race to the bottom for price. A firm’s people and interaction with clients are the factors most likely to make it different.”
While AI adoption is low, the report cites examples of firms that are using tools such as Microsoft Copilot. Wither & Rogers has offered Copilot to lawyers who want it, with chief strategy and operations officer Zoe Bailey commenting that only a few have embraced the opportunity fully, “but it can save so much time, even just on finding the answer to a simple question about a past meeting.”
Download the report for the full findings
The report, which was run in partnership with legal publication LPM, takes a much deeper dive into these findings as well as unpicking the challenges when it comes to cybersecurity and risk.
“Midsize law firms play a crucial role in the UK legal market, yet they are often underserved when it comes to tailored research, strategic guidance, and benchmarking tools,” shared Oliver Tromp, UK Regional vice president at Actionstep. “This report serves as a benchmarking tool that enables law firm professionals to compare their approach to that of their peers and provides a clear snapshot of what law firm leaders at midsize firms are prioritising as they explore new technologies, refine processes, and drive transformation to secure a competitive edge.”
Actionstep will be exploring the future of law firm operations and the key findings of this report on 6 March at 10am in London, if you wish to join, you can sign up HERE. Or download the report HERE.
On the panel are Alex McPherson, managing partner and founder of Ignition Law; Hong Tran, sales director at Accesspoint Legal; Richard Brent, director of Burlington Media Group; Oliver Tromp, regional vice president, UK of Actionstep; and Caroline Hill, editor of Legal IT Insider.