The latest LPM Legal IT Landscapes Report has revealed that firms are feeling increasingly threatened by legal technology-based new businesses and are keen to adopt new technologies to set themselves apart from the competition – yet many are equally concerned that their firms simply aren’t allocating enough budget to keep up.
Sponsored by tmgroup, along with a handful of other key players in the legal services and technology sector, the LPM Legal IT Landscapes Report 2019 shows that just 6% of the average firm’s revenue is invested in technology, and of that only 12% is spent on new things like creating client-facing systems – equating to approximately 0.5% of revenue.
Emma Vigus, Chief Commercial Officer (CCO) of tmgroup comments:
“Respondents acknowledge the threat posed by new entrants to the legal sector who focus on service delivery via technology – and the data demonstrates that law firms recognise the potential in technology-driven innovation. But with the budget allocated to the development of non-BAU technology at under 0.5%, firms are not investing in combating the competitive pressure.”
Legal technology-based new businesses pose one of the biggest threats
With such minimal investment, it is hardly surprising that 52% of firms do not believe they devote enough to new or non-business as usual technology. No doubt, this is exacerbated by the perceived threats in the market including; ‘Legal technology-based new businesses’ – concerning 18% of respondents – and ‘firms just like mine already in our geographies’ (15%). Both of which highlight that firms are becoming increasingly aware of the need to set themselves apart from the competition in order to succeed.
Simon Elven, Commercial and Marketing Director at Tikit comments:
“What is starting to occur is a growing realisation across mid-market firms that these things are not only desirable but inevitable and that any long-term plans must take these into account.”
Client portals, CMS and AI all pinpointed as key game-changers for efficiency
According to the report findings, technologies expected to bring the best combination of competitiveness and efficiency to law firms are client portals, Case Management Systems (CMS) and Artificial Intelligence (AI).
Firms investing in these technologies are already benefiting from increased efficiency and being able to deliver an enhanced customer journey, whilst those who aren’t should explore which technologies will give them the best return – even with just a slight increase in their technology budget.
Eddie Harrison, Head of Business Optimisation at Lowell Solicitors comments:
“SME law firms should get out there and take calculated risks to bring about process changes and efficiencies. Even the smallest of gains can have a huge impact when scaled up, especially when relieving staff of some rather boring and repetitive tasks.”
Improving the customer experience should be at the heart of any investment
One of the most resonating statements observations in the LPM Legal IT Landscapes Report is that “The market is maturing in a way that means SME firms will have to differentiate, innovate and improve their services to remain successful.”
With limited resources at their disposal, this is certainly a challenge, but there is a simple way to separate the wheat from the chaff – simply by asking “will this improve the customer experience?” This will help to make sure that any investment is giving firms a much-needed competitive edge – and not going to waste. As Julia Warrilow, Finance and Operations Director at Thursfields confirms; “It’s ultimately about what adds value to the client experience.”
It’s also about understanding the technology investment that is both plausibly affordable for each firm AND has the potential to move the dial on revenue. For example, automating repetitive and mundane tasks can free solicitors up to spend more time on informed decisions and delivering a better overall customer experience; resulting in up and cross sell opportunities, repeat business and referrals.
This is where LPM’s ‘competitiveness v efficiency’ chart can really help to narrow down the search, with technologies such as client portals ranking highly. Available through conveyancing platforms such as tmconnect, client portals can make a real difference to the customer experience – from empowering clients to keep an eye on progress and communicate securely with their solicitor, as well as receive online forms and complete tasks.
With so much to be gained, is it time firms started asking themselves if they are truly placing their customers at the heart of their investment decisions?
The LPM Legal IT Landscapes Report 2019 is an annual snapshot of law firms’ changing technology priorities – published on Friday 8th February 2019.