UK Small and Medium-Sized Law Firm Market: Cautious Optimism Meets Tough Competition
While many UK small and medium law firms have adapted to – and even thrived during – the challenges of the past year, they face the same pressures as at the end of 2019: managing high fixed expenses, increasingly demanding clients, regulatory changes and talent shortages.
The Thomson Reuters UK Small and Medium-Sized Law Firm Market 2021 report showed that the competitive landscape remains tough, with 53% of small firms rating online legal service providers as the biggest threat to their firms. The report also explored how firms win work, with survey respondents overwhelmingly ranking repeat business as the most common way to win new business and rating social media as their most preferred marketing channel.
Controlling costs is firms’ top objective for 2021, according to 66% of small law firm respondents and 51% of medium-sized firm respondents. Brexit was not mentioned as firms concentrate instead on the specific economic and regulatory changes impacting their practice areas.
In addition to sizing the competitive landscape, the report gauged firms’ use of technology. Survey respondents indicated they understand the potential of technology to provide value and improve the client experience, yet they are cautious about implementing new solutions.
Only 41% of respondents plan to implement new technology in the next 12 months. Barriers to adoption included a lack of clarity about the benefits of technology solutions, a lack of confidence around implementation, and effective change management approaches.
These barriers may help explain firms’ low technology adoption rates. Only 44% of firms reported investing in automation to improve processes and productivity, and just 30% use client collaboration technology.
On a positive note, 46% of respondents indicated they have a high level of technology expertise within their firms. Perhaps the tech savvy can help their firms address the barriers to implementation, particularly around the perception of the value that technology brings to services that rely on strong personal relationships between lawyers and clients. Ideally, firms’ technology experts can help their hesitant colleagues realize how new technologies can support – not replace – that relationship.
For more insights, download the full report at http://bit.ly/SOLMUKSM2021.
