Law firms and sectors face tremendous challenges nowadays due to unexpected pandemics, and it is foreseeable that these hardships would increase in the coming years. Legal industries were continuously bearing disruptions from both the internal levels and from customers. In this review, there is a detailed discussion about law firms’ challenges and effective strategies for the competitive law firms to beat their opponents. Several disruptions faced by the legal marketplace includes law firm mergers, the demise of law aid, high outsourcing, referral fee ban, and many others that are limiting the market value of legal industries
Recent challenges to legal industries
During the COVID-19 pandemic, operation in law firms is effectively changing. The client demanding services would also be considerably changed in future. The need to use adequate technology is emerging to prosper in the world. New technologies include a quick setup law firm toolkit that targets the smaller law sector. Some people argue that lawyers could be the next profession to be replaced by computers. Similarly, the most significant challenges affecting the legal marketplace are outlined below.
• Getting clients is now a difficult task due to Increased competition
Surveys conducted by Lawyer Firm News reported that law firms’ most significant challenge is to get new clients in such a competitive environment. Every hindrance in the growth of the legal marketplace has a definite hybridization of this challenge. The demand for increasing margins instead of revenue reduces the growth of the legal services. The online demands of law services are much higher nowadays than before. There is much workload on some major firms to maintain their digital sales of their potential clients. Also, the DIY law solutions for individuals and organizations decrease the demand for local legal products.
• Specialization pressure
There is another challenge to the inexperienced law firms to become more specialized and experts. Major law marketplaces have been working digitally, have a lot of loyal clients and chain customers. These active legal firms have gained all the customer crowd. The clients usually demand experienced service in subject matter instead of newbies. Hence, there is much pressure for younger firms and solo attorneys to make their specialized marketplaces have customer’s trust and experience. The internet provides more power to potential customers as they can demand more specializations, and law firms are risking obsolescence.
• Expectations of clients to get cost-efficient services
One of the most critical challenges to the legal marketplace is introducing cheap legal services, i.e., DIY services. The customers started arguing about the costs of quality services. The potential clients demand much more at such a low cost which decreased the perceived value of law expertise. The demands of legal services are not much nowadays, so law industries continuously undercut each other by decreasing their cost values. Some of the firms are struggling to regain their market values and to increase the existing revenue streams.
• Increasing technology solution variety
The evolution in technology was relatively slow in the past. Recently, a list of law firm technologies is introduced every year, making the best choice factor complicated. The testing of new technologies is costly and time-consuming, but denying the use of the latest technology is unacceptable. Many law firms introduced a cloud-based model in their law firms which is less in cost. Using this model, they can find out the effectiveness of technology without integrating it. They pay for the technological device after testing its credibility and working profits without any long-term commitments. Daniel Setareh, a Beverly Hills truck accident lawyer, says he has used cloud-computing for years and it has significantly improved his practice. “We are so much more efficient now.”
• The demise of legal aid
In the United States, legal aid is entirely cut by which law industries are much affected. It causes a significant impact on legal practice along with the clients who could not have an approach towards legal aid.
• Growth in outsourcing
There is a significant trend of outsourcing a tremendous amount of work to other countries to attain greater efficiency. The service outsourcing to other countries exert pressure over the other younger law firms who are unable to get potential customers
Hence, the upcoming years will come up with significant law firms’ significant changes that shift the cycle continuity completely. The framework of legal industries is gradually changing its shape, and there are specific employment law updates. The future would have many opportunities and challenges. The potential industries having learned for life mindset will avail several opportunities. The rest will keep criticizing the current state and remain hoping to get the old days back.