5 Predictions for the Legal Industry in 2019
In 2018, law firms have faced many challenges including maintaining profitability, running efficiently, recruiting and retaining talent, and using technology as an enabler.
All of this against the backdrop of this client-empowered era, where clients now demand services that are faster, simpler and more tailored to their needs. This has forced law firms to take note of the fact they need to digitise or be at risk of falling behind.
There are more opportunities than ever before for firms, of all sizes, to progress. In 2019, this will mean law firms become more innovative both in terms of adoption of technology and general operations. Below Dan Tacone, President at Intapp, presents 5 predictions for the legal industry this year.
1. The big four accounting firms will become even bigger competition for traditional law firms
In recent years, the big four have developed legal teams with thousands of lawyers and look set to become key players in the legal industry in 2019. These teams will continually invest in the latest technologies and look at everything from hiring practices to operational models as a way to stay ahead of firms.
With the rise of these alternative legal services, traditional law firms will have to look at ways to differentiate and provide more value to their clients. In 2019, we’ll see traditional firms look to the big four legal teams and make direct comparisons between what they’re delivering and how they are performing.
2. Industry-specific technology providers will continue to take market share from larger horizontal players
IDC recently predicted that by 2022, 60% of global GDP will be digitised. If this is going to be achieved, enterprises’ digital innovation capabilities must be transformed. This provides a huge opportunity for technology providers to create capabilities that are adapted for industry-specific needs.
While there has been a trend towards vertical “purpose-built” solutions for a while, in 2019, we’ll see more entering the market and more demand among law firms. We’ll see more innovation come into play that solve the specialised requirements of the professional services industries, including legal, in a way that has never been available from traditional horizontal technology providers.
While there has been a trend towards vertical “purpose-built” solutions for a while, in 2019, we’ll see more entering the market and more demand among law firms.
3. Law firms will accelerate overhauling their pricing models
In recent years, we’ve seen a slight movement away from the billable hour that law firms have traditionally been associated with towards more of a value-based pricing model. This has been facilitated by client needs changing and an emphasis on total transparency when it comes to billable work per hour. However, we’ve recently seen a stagnation here as firms are yet to understand the cost of delivering services, and where savings can be made.
In 2019, we expect that this trend towards value-based pricing will flourish. In adopting technologies that facilitate automation, firms can free up the time of lawyers, ensuring their time is spent on the higher-level strategic tasks rather than the admin tasks, traditionally a core part of the billable hour model.
4. Firms will need to be more transparent to win over in-house teams
Firms have to impress corporate in-house legal teams that they work alongside. This is because corporate legal teams are becoming the epitome of the empowered client, well informed about pricing, value, and competitive alternatives.
If firms are to retain and win in-house business, they will need to deliver a modern and transparent experience that can adapt to the needs of the client. Corporate legal teams will increasingly look for a business partner in the firm they chose to work with rather than just seeking out basic legal support.
If firms are to retain and win in-house business, they will need to deliver a modern and transparent experience that can adapt to the needs of the client.
5. Restless clients will become even more demanding for better service models
With new technologies – and an increase in automated processes – client expectations will grow and they will expect a better and more modern experience from their firm. A new level of collaboration will be introduced, with firms becoming more transparent about their offering. Automation and AI will be vital to driving these efficiencies and savings across the whole client lifecycle: not just areas of business acceptance like billing and time reporting or other back-office functions, but client development and delivery. With more modern processes in place, this will enable firms to improve client retention and also boost new business opportunities and conversions.