Three trends that will shape law firms in 2022
Colin Bohanna, general manager at Clio, summarises important findings from Clio’s Legal Trends Report. He also provides insight into issues that law firms should deal with over the next twelve months.
The past two years have brought major and rapid changes in the way the legal profession operates. These changes are not temporary.
Research shows that hybrid work and remote communications are here to stay. The question solicitors and law firms should be asking is: what does this mean for the future of legal?
Answers to this question are explored in Clio’s 2021 Legal Trends Report, the legal industry’s most in-depth analysis into the state of the legal practice.
Now in its sixth year, the Legal Trends Report includes aggregated responses from 150,000 legal professionals using Clio over the last two years. It also includes survey responses from more than 1,000 legal professionals and 1,000 general consumers on what they deem most important to them today and in a post-COVID world.
Following on insights from last year’s report, which showed significant levels of technology adoption among law firms, this year’s research indicates that new technology-enabled capabilities are part of a longer-term shift that will be further driven by consumer demand for more remote-enabled legal services.
In this article, I present three important takeaways from the report that law firm owners in the UK should consider when planning for 2022.
1. It's critical for law firms to design and provide more flexible legal services that meet new consumer expectations
In 2021, the most successful firms continue to be those who have adopted the technological solutions that enable them to provide more flexible, client-centred services.
As consumers have adopted more remote forms of communication in response to the pandemic, they’ve grown accustomed to new methods of interaction that have also shifted their expectations when it comes to working with a lawyer.
This year and into 2022, the ability to be flexible will be paramount in meeting client expectations.
Per the Legal Trends Report, 79% of consumers see the ability to work remotely with a lawyer as an important factor in choosing who to work with, and more than half indicated a strong preference for video conferencing solutions across multiple points in a legal matter.
While technological solutions may have provided a significant competitive advantage in the past, they are now becoming a standard feature that law firms are expected to offer in meeting the needs of today’s clients.
Failing to recognise this reality and adopt the tools consumers expect will leave firms at a distinct disadvantage when it comes to attracting and retaining clients.
2. While the technology gap between growing and shrinking firms has closed considerably, extensive use of well-implemented technological solutions continues to correlate with firm success
When analysing the results of the 2021 Legal Trends Report, it was observed that a “growing firms” group, identified within the report, had – on average – seen annual increases amounting to 135% since 2013.
What did these growing firms, who had consistently grown their revenues, have in common? They are more likely to adopt client-centred technologies.
In fact, these firms are 41% more likely to use client portals and 46% more likely to use client intake and client relationship management (CRM) solutions.
Reporting tools are also used twice as much in growing firms, or firms that saw a minimum of 20% year-on-year revenue growth.
The success of these firms underscores the importance of understanding how to effectively harness the benefits of these flexible technologies in an ever-tightening and highly competitive market.
3. Successful firms are redirecting spending away from physical office space and towards more client-centred, flexible solutions like practice management software
Data from the 2021 Legal Trends Report shows that when it comes to financial spending, firms are focused less on investing in physical office spaces and more on enhancing their digital capabilities with practice management software.
Survey data shows that legal professionals are most likely to see legal practice management software as a significant expense (67%), and they are most likely to spend on additional software in the future (61%). Law firms were least likely to invest in office space (27%).
The implications of these investments indicate that the legal industry will be more prepared to create more tech-enabled client experiences.
The current reshaping of how legal services are provided and accessed will persist into the future as client expectations continue to adjust.
Firms that embrace new tools and processes are poised to become more resilient, flexible, and client-centred; while those who do not will struggle to remain relevant in a world that has changed for the better.
These findings and other insights are available to read in full now in the 2021 Legal Trends Report.