Keeping page with fast-moving technology – and keeping staff – are two key challenges facing law firms, a fact verified by a recent survey undertaken by the Australian Financial Review in their ‘Partnership Survey’.
The two are the major competitive threat to their business model, the survey revealed, as well as changing client demands and economic conditions that affected both profitability and market share.
Top-tier firm Ashurst said the legal services market “is undergoing the most radical transformation in our professional lifetime, and it is accelerating”.
“There is rapidly expanding disruption in our market, and a growing number of disruptive players and influences,’’ the firm said.
Baker McKenzie also reported on the pressures the firms faced, whichw were coming from many directions, they said.
3 Key Threats
Two of the other key threats seen by the firms, and which we have discussed on other occasions, are the development by the Big Four accounting practices of their legal services, along with the growth of ‘new law’ firms or alternative legal providers.
“Amongst our clients, we see new approaches to buying legal services, measuring value and balancing tech support with people. Most importantly, we see our clients interacting with their own clients in whole new ways, often driven by big data,” the AFR reported Baker McKenzie.
The third major threat was the need to retain legal talent.
One fast-growing firm noted that it was shifting its focus from high growth to ‘deep engagement’ to build teams and retain talent.
The growth of disruptive technologies, increased competition, changing client demands and other factors continue to test the mettle of firms seeking to not only grow their market share, but also simply retain market share.