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Competition Within The Legal Industry

Making your presence felt in the competitive world of law has never been simple

by Fatima Freifer

case management software, practice management software, legal accounting software, legaltech, technology for lawyers, case management, immigration, london, united kingdom

Introduction

Competition in the legal sector has never been fiercer, with a steady stream of new entrants exploiting changes in legislation and technology to enter the overcrowded legal market. Law firms are constantly under pressure to stay on top of their game, and this is only going to become more of an issue in the near future.

In recent years, the legal market in the United Kingdom has grown steadily. Despite Covid-19, many law firms in the UK have managed to keep their heads above water. Despite this impressive resilience, UK law firms will need to brace themselves for market changes as new entrants emerge.

Changes to Existing Regulation

Frequent regulation changes, such as the SRA’s 2013 “Red Tape Initiatives,” the long-awaited redrafted Solicitors Accounts Rules, and other SRA changes in the sector, all aim to improve “access to justice” and efficiency. They are essentially intended to increase supply and demand in the legal sector,including the domain of the legal software company as a number of firms are frequently priced out of the market, particularly as price transparency increases, with more firms readily publishing prices on their websites. [1]

Freelance Lawyers Gaining Traction

Freelance solicitors, also known as SRA-regulated independent solicitors, are self-employed and will be able to engage with and advise their clients directly. This new system could help clients save money, give lawyers more control over their caseloads, and generally provide more options for the public in terms of legal services. However, law firms may find that this reform has an impact on their retention rates, especially as the best case management systems are increasingly affordable to lease.

The Solicitors Regulation Authority (SRA) introduced a regulation in November 2019 that allows solicitors to practise on their own without being a recognised sole practise (RSP). Solicitors previously practised either at SRA-authorised law firms or independently with the SRA’s authorization as an RSP. The legal market has been widened as a result of this new regulation. [2]

Efficiency of Services

Clients understand that quality legal services are expensive, but they are increasingly scrutinising and questioning billable hours. A sophisticated legal research tool, such as law firm computer software, increases efficiency and improves the quality of billed hours using the best billing software for lawyers available in the market at the best price point. Client intake and crm software for mid-sized legal firms are increasingly important, as clients, whether informed or not, have preconceived notions about how long certain legal tasks should take. [3] Company law software, which is usually powered by artificial intelligence (AI), quickly completes tasks that have traditionally slowed down law firm resources, leaving clients pleasantly surprised at how far their legal fees can stretch. Client relationship management software for small businesses is not as developed or competitive as the larger firms, which is why efficiency is key to staying afloat in the market. [4]

Those who embrace the new normal will be noticed by leaders and will help the company navigate the critical next few years. One of the key areas where many younger legal professionals inherently have the skills their firm requires to both survive and thrive post-pandemic is technology knowledge.

Many law firms have failed to capitalise on it due to a lack of understanding and data-related fears. However, because law firms had no choice but to react and adapt when COVID-19 first went into effect to support home working and client-facing and operational necessities, they had no choice but to react and adapt. [5] This has accelerated firms’ adoption of technology for the benefit of their clients, employees, and operations. As a result, law firms prefer legal professionals who understand technology and its implementation in order to produce tangible results. [7]

Given their changing legal needs and the need to maximise value in all aspects of their operations in this new environment, some clients may be more likely to switch to another provider that can provide the best outcome for the most reasonable fee. [8] This task force encourages lawyers and firms to consider what makes their practice truly unique. For many of the issues that a client may face, there will always be a viable alternative. For legal professionals in markets where there is a high risk of substitution, the best way forward is to let go of some of the work that the substitutes are doing and refocus your efforts on the services that are truly unique to a given law firm. [9]

Conclusion

To succeed in such a crowded market, law firms must focus on the fundamentals, such as offering incentive packages that attract and retain the best lawyers and staff, as well as consistently providing added value and attentive client service, while supplementing their offering with specialist knowledge. They must also be ready to embrace cloud based invoice management for legal firms, client profiles legal software, and cloud based law in order to stay on target to filling in the necessary quotas. Investment in technologies that improve efficiency and productivity, such as the use of AI and automation, should be prioritised. [10]

In the current climate, lawyers and law firms face numerous challenges. With the aftershocks of inflation still reverberating throughout the legal world, it’s time to make a change, to return to business basics to some extent, and to embrace modern technology in order to be successful.

References

[1] Staying competitive in the legal market, Mike Buxton https://www.mitchellcharlesworth.co.uk/news/staying-competitive-in-the-legal-market/

[2] Competition in the UK’s Legal Market, Sophia Gonella, August 31, 2020, https://thestudentlawyer.com/2020/08/31/competition-in-the-uks-legal-market/

[3] STANDING OUT IN A COMPETITIVE SECTOR, AUGUST 7, 2020 https://www.lex100.com/2020/08/07/standing-out-in-a-competitive-sector/

[4] How small law firms can stay competitive, Kieron Darraugh, 27 Oct 2021 https://www.lexisnexis.co.uk/blog/future-of-law/how-small-law-firms-can-stay-competitive  

[5] 6 ways leading law firms stay competitive, https://legal.thomsonreuters.com/en/insights/articles/6-ways-leading-law-firms-stay-competitive

[6] The Five Forces: A different way of looking at your firm’s practice, December 10, 2020, https://legal.thomsonreuters.com/blog/the-five-forces-a-different-way-of-looking-at-your-firms-practice/

[7] The Greatest Legal Sector Challenges (and Opportunities) 2020-2030, https://www.moorelegaltechnology.co.uk/insights/business-innovation-for-lawyers/the-greatest-legal-sector-challenges-and-opportunities-2017-2027.html

[8] UK Legal System and Adaptability, Fatima Freifer, https://goodlawsoftware.co.uk/the-uk-legal-system-and-its-adaptability-in-the-face-of-technological-change

[9] Managing Clients in Different Time Zones, Fatima Freifer, https://goodlawsoftware.co.uk/managing-clients-in-different-time-zones   

[10] How Legal Tech Will Shape Up Law Industry, Fatima Freifer,  https://goodlawsoftware.co.uk/how-legal-tech-will-shape-up-the-law-industry