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  4. IT-driven change biggest cause of concern for law firms, survey finds

IT-driven change biggest cause of concern for law firms, survey finds

15th March 2017 | information technology , practice management

Legal firms globally are at a tipping point as they struggle to keep up with advancements in technology that continue to disrupt the market, according to a new report by accountancy and business advisory firm BDO.

Carried out by independent consultancy RSG Consulting, the Law Firm Leaders Survey polled the managing partners and senior partners of 50 national and international law firms. It found that 98% said the pace of change in the legal industry, driven mostly by the impact of technology, is a real cause for concern.

The report expects that a new period of disruptive market challenges will dominate the sector during the next five years.

Technology is expected to have the greatest impact, with four out of five law firm leaders seeing it as a major factor to their firm’s success over the next five years, and 94% considering it a strategic priority.

Changing client demands, generational change and competition are the next biggest threats.

UK firms considered US law firms, new market entrants and the Big Four accounting firms as significant competitors to watch.

They also expect businesses to take more work in-house, where automation is likely to reduce the need for external lawyers in routine and high volume areas.

When asked about their Brexit concerns, 32% of global firms and 24% of UK firms said an exit from the EU would have the greatest impact on the legal industry over the next five years. While some believe lawyers will benefit from a temporary uptick in regulatory work as regimes and rules change, more are pessimistic about potential long-term impacts on workflows.

Matthew White, international practice leader of the Professional Services Group at BDO, commented: “In this new world where technology and changing client demands are causing firms to reconsider how legal services are delivered, is it feasible that law firms can continue to provide legal services in the same way they have done for decades?

“Law firm leaders must accept that if they want to maintain competitive advantage they will need to be much bolder in their approach to overcome with these disruptive market changes.”

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