Dr Clare McConnell assesses the threats & challenges facing law firms
Law firms are facing a number of unrelenting challenges. They continue to suffer the effects of the credit crunch and are having to change the way they do business to meet the ever increasing demands from clients to provide better value for money.
For many, responding to these challenges and changes will be difficult. Those who do so will put themselves in a strong position to capitalise on the upturn in the economy when it happens.
What are the key issues being faced? There are many. Some of the most significant ones are: the need to cut cost base; and the threat of competition from other professional service providers where the advice required is not a reserved legal matter, such as corporate—commercial advice.
The need to cut cost base
At present law firms’ profits are being adversely affected. We have all read stories in the legal press highlighting this and reporting on some firms making cash calls on their partners.
The response by many firms has been to optimise their cost base
