The global legal industry is at a tipping point as firms struggle to keep up with advancements in technology that continue to disrupt the market, according to a new report published today by accountancy and business advisory firm BDO.
According to the BDO Law Firm Leaders Survey, which polled the managing partners and senior partners of 50 national and international law firms, 98% of leaders said the pace of change in the legal industry, driven mostly by the impact of technology, is a real cause for concern.
Tony Young, Partner in Business Services at BDO Australia said although the survey was undertaken in the UK it was still relevant to the Australian market as it captures the sentiment of global law firms, many of whom have a footprint in the local market.
“Technology and changing client demands are causing law firms to reconsider how legal services are delivered,” Mr Young said.
“The question to ask is if it’s feasible for them to 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 these disruptive market changes.”
The report indicates that a new period of disruptive market challenges will dominate the sector during the next 5 years.
Survey findings shows that technology is expected to have the greatest impact on law firms in the short term, with four out of five firm leaders seeing it as a major factor to their firm’s success over the next five years. Unsurprisingly, technology is considered a strategic priority for 94% of law firm leaders surveyed.
After technology, national and global firm leaders said changing client demands, generational change and competition are the biggest threats.
They 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.
Almost half (44%) of law firm leaders said cultural change will be a big challenge in keeping up with new technology. Of those, the majority (59%) said it was a firm-wide issue, while 41% said partnership resistance could be the biggest problem.
To read the BDO Law Firm Leaders Survey visit http://www.bdo.com.au/en-au/insights/brochures/business-services/managing-rapid-change-bdo-law-firm-leadership-se
Research participants were drawn from of the top 200 UK law firms by revenue and the top 100 Global law firms by revenue. Research participants from the UK 200 all held the position of managing partners, senior partners, CEOs or chairs. Participants from US headquartered law firms were regional or office managing partners based in the UK.
The survey component of the research was completed by 50 law firm leaders from:
- 38 law firms headquartered in the UK
- 5 global law firms headquartered in the USA
- 6 global law firms headquartered between the UK and at least one other country
- 49 unique law firms in total.
In addition to the survey, 6 face-to-face interviews were conducted with law firm leaders from a mix of UK and global law firms between December 2016 and February 2017.
Collectively, the survey and interviews participants covered 51 unique law firms, representing 16 of the top 100 global law firms, 12 of the top 20 UK law firms, and 35 of the top 100 UK law firms.
Law firm geographic categorisations
Law firms were categorised according the following definitions:
- Global = offices in at least three continents
- International = offices in the UK, and at least one other country
- National = offices in the UK only
Rosey McGrath, National Media Adviser
email@example.com Tel: +61 2 8264 6583 Mob: +61 408 749 909