Introduction
How can law firms build their competitive advantage in 2023? In partnership with ACEDS, IPRO surveyed 182 law firm professionals to explore their perceptions on the key challenges their departments are likely to face in 2023, the expectations and priorities they set for this year, and how they see technology supporting their teams in achieving the set goals.
Law firms have experienced turbulent few years, defined by exponential growth in data volumes, as organizations evolve using more collaboration tools. The volatile macroeconomic environment of 2022 has caused many law firms to increase rates, as well as reconsider their priorities and goals for this year.
As the legal industry continues to evolve, law firm professionals are faced with an opportunity to embrace transformational change and leverage the technological developments of 2023 to their advantage.
That said, here are the top five learnings from this report on where law firms’ priorities and goals lie in 2023:
Law firms expect clients to demand more output at lower costs in 2023
Though 2022 has yielded profitable financial results for law firms, 2023 will likely be driven by a more challenging macroenvironment, defined by inflation; slowing demand, and higher expenses. That said, 69% of our survey respondents have pointed out the increasing client demand for ‘more output with less costs’ as the trend they agree with the most.
Furthermore, over 65% of in-house corporate legal teams are likely to reduce the number of law firms they work with, as they see keeping more work in-house as a measure to mitigate the most pressing challenges of 2023. Clearly, this would also result in an increased pressure on law firms, as clients expect more transparent pricing structures, greater use of technology, and faster turnaround times at the same or even lower costs.
Greater use of technology to become more competitive is the main priority for law firms for 2023
Notably, the vast majority of our survey respondents seem to recognize the importance of adopting modern eDiscovery technology in facilitating law firms to effectively deliver their legal services. When asked about their key priorities for 2023, 73% of law firm professionals said they aim to increase the use of technology to become more competitive in 2023.
Providing more innovative services/offerings is another priority area for law firms in 2023, pinpointed by 56% of respondents. As highlighted within the 2018 Global Trends in Hiring Outside Counsel survey by The Lawyer Research Service, the downtick in client satisfaction with law firms has been apparent for some time now. As pointed out previously, corporate legal teams are looking to reduce the number of law firms they work with in 2023 and are likely to bring more work in-house.
Hence, to improve their competitiveness in 2023, law firms will have to double down on providing an end-to-end client-centered experience.
Difficulty acquiring new clients is the #1 factor that law firms expect to impose the biggest challenges for their practices in 2023
Acquiring new clients seems to be an imposing challenge particularly for smaller sized law firms (which represents 24% of our research population). Thus, unsurprisingly, over 50% of survey respondents highlighted new client acquisition as the main challenge they foresee in 2023.
Next, 47% of law firm respondents emphasized the lack of internal efficiency as the most prevailing factor to enforce the biggest challenges for them in 2023. This way, we see that increasing the firms’ customer bases and optimizing current workflows will be of crucial importance for securing law firms’ competitiveness this year.
While new clientele can be attracted by employing a robust marketing strategy combined with targeted face-to-face networking for example, internal efficiency optimization can be attained by successfully leveraging innovative legal technology
Reviewing more data sets in less time and organizing large volumes of data among the key reasons for adopting AI-driven eDiscovery technology
Roughly 60% of the survey respondents couldn’t choose one key reason that made them adopt an AI-powered eDiscovery solution, saying that all of the following were drivers for their law firms to adopt AI:
• Review more data sets in less time;
• Find evidence faster within investigations;
• Organize large volumes of data, and give access to the materials when you need it;
• Identify privilege documents and verify privilege coding;
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- What AI-driven eDiscovery features do law firm professionals apply most often within their practices?
- Which use cases do they use eDiscovery technology the most for?
- What role will technology play in supporting corporate law professionals in 2023?
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