Bellwether 2024: lessons on law firm growth, published this week by LexisNexis Legal & Professional, looks at growth plans, investment strategies and employee-employer relations of small law firms and solo practitioners. It found firms plan to grow organically in the next 12-18 months rather than through mergers and acquisitions. The survey of 265 associates and senior leaders at small and medium sized firms found 63% favour organic growth, up from 40% in the previous year.
More than one-fifth (21%) of the firms have already increased their tech spend while 35% plan to do so over the next 12–18 months—only 26% have no plans to increase tech investment (see image).
Ben Giaretta, partner at Fox Williams, cited in the report, said the biggest tech opportunity for law firms is leveraging their client and billing data.
‘Firms that purchase technology in a way that makes the best use of their data will fly in the next decade,’ he said.
‘Firms that fail to do this may end up buying costly systems to no advantage—and they will probably end up being left behind by competitors.’
In terms of spending priorities, tech investment was closely followed by hiring more lawyers and investing in marketing and legal spend. Retaining existing lawyers may be an easy ambition to fulfil—the Bellwether found 62% of lawyers plan to still be at their same firm in five years' time, with only 10% intending eventually to move to a larger firm.
Firms were also asked to name their biggest challenges for the next 12 months. Some 70% of firms named keeping up to date with near-constant changes to both the legal industry and the law, while 69% cited the challenge of meeting compliance regulations. These were closely followed by attracting new business and cybersecurity (cited by 67%) while 62% are concerned about the cost and renewal of professional indemnity insurance.
More than one in five (22%) regularly rely on free-to-access resources for legal research, such as Google, forums, blogs or ChatGPT.
Tim Rayner, head of small law go-to-market team at LexisNexis UK, said: ‘Lawyers at smaller firms often lack the luxury of restricting their legal expertise to a specific area of the law.
‘Instead, there is an expectation that they're experts in everything. They need to be able to jump from one specialist area of the law to another in moments, otherwise they will struggle to keep pace, so access to the latest legal content will be critical.’
Read the full report at: https://www.lexisnexis.co.uk/research-and-reports/bellwether-2024.html.
