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We look at the main challenges confronting law firms in 2023, exploring productivity, specialist knowledge, cyber security, recruitment and retention, and legal tech.

It has proved another difficult year in the legal sector. We’ve seen myriad economic challenges, ranging from high inflation, , the knock-on effects of the pandemic, the , and so on. We’ve seen various political challenges, ranging from the invasion of Ukraine, strikes and protests, the environmental crisis, and so on. Law firms and lawyers are used to working in difficult economic and political circumstances. Their power to change such circumstances are limited.

But law firms and lawyers do have control over sector challenges. Such challenges often arise due to the above, but the reaction to them often defines the success of firms and lawyers. To react properly demands knowledge of the main issues. So, with that in mind, we want to explore five of the top of the challenges facing law firms, starting with perhaps the most talked about issue in the sector.

Boosting productivity

The first challenge seems like a perpetual challenge. But productivity has become a much talked about issue in 2023. A recent in-house survey from ³ÉÈËÓ°Òô, for example, identified productivity as the top priority for lawyers. And law firms of all shapes and sizes tend to deem it a priority, too.

There are various methods to achieve greater productivity. Firms can embrace agile working practices that allow lawyers to work without adhering to traditional boundaries, without hierarchies creating bottlenecks. found that 67% of organisations report substantial increases in productivity following the emphasis on agile working – and law firms are likely no different.

Legal tech is another route. Automation allows lawyers to achieve more with less, freeing up time to focus on more valuable work, as shown above. Firms can start small-scale and grow from there, automating tasks such as , payment collection, data entry, and document creation.

Read our practice notes on effective time management

Legal tech also helps lawyers with their core value-adding tasks, particularly legal research. Consider, for example, the massive productivity boost provided by Lexis+® UK. The platform allows lawyers to find quick and easy answers to questions and provides a constant stream of leading legal content, all of which lawyers can filter and refine to suit their needs. It is no surprise that an investigation by the University of Manchester found that lawyers using Lexis+® UK for research were saving over eight minutes per task, on average, which could save them eight hours every week.

Onboarding specialist knowledge

‘As markets become increasingly complex and inter-connected, clients require the integrated capabilities of highly specialised practices and industry sector expertise,’ says Andrew Levander, chair of in a recent ³ÉÈËÓ°Òô investigation, . The legal market, driven by expectations of clients, has been demanding ever greater specialisation.

That is a particular challenge to smaller law firms, as larger firms are typically able to offer such specialisation. David Wilkins, Lester Kissel Professor of Law at , sums it up: ‘The Big Four can offer a far higher integration of technology, project management, and process management; they employ a huge number of people across a huge range of specialties.’

All law firms need to embrace specialist knowledge. They should aim to onboard people entirely dedicated to far tech, project management, operations, and other areas, if possible. And, importantly, they need to focus on strategy specialists, particularly in areas such as environmental, social, and governance (ESG) initiatives. Clients, as , now expect firms and lawyers to be well-versed in that area, which means hiring (or upskilling) to cover that expertise.

Increasing cyber threats

Cyber attacks during the pandemic. That growth stems from increased vulnerabilities – due to remote working, redistributed priorities, flagging tech infrastructure, and minimal perceived risk. Too many law firms have filed to appreciate the very real threat of cyber attacks.

The good news is that ample protection is relatively easy. You can take simple steps, such as:

• Run system updates to plug vulnerabilities. The process is called ‘patching’ and it generally fixes potential bugs that cyber criminals can exploit. The best option is to use – or, better still, automated patch management software – but that comes at a cost.
• Ensuring you have strong passwords. Advice from the makes the entire process fairly simple. For larger firms, consider using password managers.
• Empower your staff with training. You can simply inform them on key issues, such as how to spot phishing attacks, preventative measures to stop cyber attacks, how to react to attack, and so on.
• Conduct a . That will allow you to note your own vulnerabilities and find any potential weaknesses that cyber criminals would actively aim to exploit.
• Use cyber security tech. There are plenty of options of the market, with varying prices and functionalities. Think about your needs and choose the best option for your firm.

Even following the simple steps listed above will drastically improve your cyber security.

View our cybersecurity practice notes and tools here

Recruiting and retaining legal talent

Recruitment and retention is another challenge for firms, particularly with the growing appeal of global firms, the Big Four, and platform firms. Cost-of-living pressures have led to many lawyers looking to other jobs, aiming for an increase in salary, more flexibility, more freedom, less time spent on tedious work, and so on. Firms need to make themselves more appealing – and, importantly, many of the elements making themselves more attractive can also boost productivity, as explored above.

Read up on how to attract and retain diverse talent.

The best option is perhaps to focus on flexibility. Fully embrace remote working and flexible working, at least as much as you plausibly can. Onboard legal tech and allow for greater automation to make working life easier for lawyers at your firm. Many lawyers are performing tedious and repetitive tasks, which take up a vast amount of their time, when they’d rather be working on valuable tasks. Automation is one method to improving recruitment and retention, as it automates tedious work and allows lawyers to focus on the more important, value-adding work.

Getting the right tech infrastructure

The final challenge relates to specialist knowledge. But it’s an area of specialist knowledge that law firms cannot afford to ignore. In recent years, we’ve noticed a sustained growth in the appetite for legal tech. Firms are increasingly using legal tech, but many are failing to make the most of legal tech.

A huge challenge in 2023 is finally putting all the right tech infrastructure in place. Firms should audit their current tech, identify frustrations and successes, consider overall goals, develop a tech strategy, and then perform effective research to find the best tech to work for you. Then, after all that, firms should revise and review their tech, on a regular basis, always looking for ways of improvement.

Meeting this challenge is absolutely essential, as it aids all of the above challenges. The right tech infrastructure will mitigate the risk of cyber attacks, boost productivity, improve recruitment and retention, and demonstrate your firm’s ability to fully embrace specialist knowledge.