Like many industries, the legal sector is undergoing a digital revolution. But at the same time, professionals in this area are dealing with a range of new challenges.
The need to adapt to new working practices
The impact of Covid-19 and evolving customer expectations mean many firms will need to invest in new technology and connectivity solutions in order to remain competitive in this post-lockdown environment.
The changes caused by Covid-19 to Law Firms
As is the case with many other sectors, the Legal profession has been hugely affected by Covid. Regardless of the area firms practice in, there have been major changes to the way business is done and delays that could have an impact on the bottom line.
For instance, many firms will have been affected by delays in getting cases heard. It’s estimated the backlog in England and Wales’ criminal court system means some trials won’t be heard for years. These delays also extend to civil matters, with many prospective clients unsure whether to pursue cases that may take years to resolve.
This results is a squeeze on finances and requires law firms to work more efficiently, with The Law Society suggesting firms are forecasting a ten to 20 per cent drop in revenue for the 2020/21 financial year.
Where business is going ahead, cases are often being heard remotely. According to the Law Society, 85% of cases heard in business courts have gone ahead virtually since the pandemic, either by phone or video conferencing. Therefore, firms will need to be equipped with the right hardware, software and networking infrastructure to ensure these go smoothly.
Remote working at a busy time
Even outside of hearings, many employees will now be working remotely. But at the same time, firms will often be busier than ever due to the pandemic, offering advice on areas such as employment law, insolvency and restructuring, and insurance claims for business disruption. This is not to mention the confusion caused by new post-Brexit red tape for many firms, who will need to take more legal advice.
One area that’s held up relatively strongly in the face of Covid’s challenges is the housing market, with house prices continuing to rise despite the uncertainty. Richard Donnell, research director at Zoopla, told the Financial Times recently: “Half [of homeowners] said Covid had created a desire for them to move and change their housing arrangements.”
Many homebuyers are keen to get sales completed before the expiry of the current Stamp Duty holiday at the end of March. But this activity creates more pressures for legal professionals to work quickly and efficiently – and again, this is against the backdrop of being unable to meet clients or view properties in person, leading to a greater dependence on digital solutions.
What’s driving Legal firms’ digital transformations?
What this means is businesses will need to become much more dependent on technology to keep productivity high and costs as low as possible, especially when working in a digital environment. But it’s not just coping with the demands of Covid that’s driving digital transformation for law firms. They’ll also need to adapt their way of working to meet evolving client expectations.
The drive for smarter ways of working
According to a survey by Wolters Kluwer, almost three-quarters of legal professionals (74 per cent) named changing client demand as a trend that will have a major impact on the way they work. Clients have grown more familiar with technology and expect their interactions with their law firm to reflect this.
For instance, one study by legal software firm Clio found:
- 50% of consumers say they are more comfortable with technology
- 52% say they are using technology more
- 58% say technology is more important to them now than before the pandemic
- 53% say cloud technology is a necessity for them
With competition high in the sector, firms that can leverage technology to provide a better client experience will be much better-placed for success.
An industry under threat
Digital Security Another factor that must not be overlooked when law firms are moving to digital services. While this is a challenge for every business, regardless of sector, it’s an issue that’s particularly pressing for legal professionals.
These firms extremely highly sensitive and confidential information that can be highly lucrative to hackers, either to steal information such as intellectual property, for example, or to seed ransomware and demand payment in exchange for access to critical files.
It’s no wonder, therefore, that research by PwC found law firms rate Cyber Security as their second-biggest risk to success, behind Covid-19, with 71 per cent of top 100 firms stating they are “somewhat concerned” or “extremely concerned” about this threat.
In May 2020, for instance, it was noted that at least seven law firms had fallen victim to ransomware or data theft. Among these was New York firm Grubman Shire Meiselas & Sacks, which was reported to have had 75GB of data stolen, including files relating to celebrity clients such as Bruce Springsteen and Madonna.
The technologies to meet clients’ needs
In order to meet these requirements, new technology will be a must for many law firms. For instance, effective audio and video communications tools are now a must-have for any such business.
These not only need to provide a high-quality, reliable connection for remote meetings and hearings but offer advanced features such as call recording and tough encryption in order to meet strict compliance requirements.
At the same time, cloud services will be essential in ensuring lawyers and other professionals working remotely have easy access to critical data and can remain in touch with colleagues and clients at all times, wherever they are.
Underpinning this will be the need for secure high-speed broadband connectivity and reliable phone services. Connections that drop out or dip in quality so lawyers have difficulty fully participating leave a bad impression on clients, harms productivity and can result in misunderstanding and miscommunications.
To learn more about how you can respond to the challenges facing the legal sector, get in touch with Arrow today for impartial advice and assistance in bringing your business up to speed