Despite a rise in confidence reported in The Bellwether Report by LexisNexis last year, both confidence and performance have dipped back to the levels reported in 2013/14. Around half (48 per cent) of firms said business is growing, compared with 63 per cent last year.

A disconnect between perception and reality

Questioning whether this drop is a ‘temporary blip or an early sign of another downturn’, the report highlights a distinct mismatch between lawyers’ key challenges and the prioritisation of changes that have been implemented or are planned. For example, 85 per cent of lawyers agree that client demands are having as big an impact on working practices as regulations, yet only 40 per cent of firms have taken on more staff to meet those demands. 

Furthermore, taking on non-fee earners to help develop business and increase efficiency is also quite low on the list of priorities, even though a number of the main challenges faced by lawyers lie outside their skillset.

Barriers to technology adoption

Almost all respondents view technology as a ‘must’, but the report suggests lawyers are still ‘reticent’ about using it. Three technology-based initiatives – investment in processes/technology, website development, and using CRM technology – are among the top six priorities for law firms, but convincing established lawyers of the need to modernise the practice ranks tenth on the list of priorities. With the latter widely seen as one of the major barriers to technology adoption, lawyers aren’t tackling the problem at its roots.

Mismatch with client values

The report also argues that clients want value for money – a good service at a fair price – and not a cut-rate service at a cut-rate price. But lawyers have yet to fully absorb this distinction between price and value, with the research showing that lawyers are three times more likely to rate the ‘value’ they offer as excellent or very good. Conversely, clients are seven-eight times more likely to rate it as average or poor. This difference stems from the fact that the two parties are using very different benchmarks to judge value. 

‘But there is hope’

Professor Stephen Mayson, independent advisor and non-executive director to law firms, said: ‘Tinkering around the edges of the cost base and blaming others for the rest, rather than tackling some possibly uncomfortable home truths, will not … secure a sound future. But there is hope. The report also shows the correlation between growing, successful firms and other identifiable factors. The foundations lie in firms actually doing something about the fundamentals of their business through entrepreneurialism, thinking outside the legal box, focusing on client value and their experience of service delivery, specialisation, re-staffing, and the appropriate use of technology.’