The legal business climate is improving but law firms still feel pressured on pricing and operational efficiency, according to a new study published today by Aderant. The 2018 Aderant ‘Business of Law and Legal Technology Survey’ found the top five challenges facing law firms are: pricing, cybersecurity, operational efficiency, technology adoption and competition. Among respondents polled from US firms, cybersecurity jumped from sixth place in this survey the previous year to tie for the top spot with pricing in 2018.
The survey finds that more than half of all respondents said business is “better” or “much better” than it was in the last 12 months. While growth is welcome, the study suggests law firms are still wrestling with familiar and perhaps, recurring challenges. Most respondents (61 percent) say it takes their firm a week or longer to publish client invoices, which is a classic example of the efficiency challenges in a traditional law firm. While almost half (48 percent) say their firms spends too much time billing and invoicing, they also noted speed bumps stem from both sides of the table. For example, respondents suggested their firm struggles with e-billing (56 percent) and outside counsel guidelines (46 percent) as corporate clients have increasingly used these vehicles to reign in legal spending.
Seize the moment
‘Our assessment is that law firms have seen topline benefits from the improving economic conditions, but some haven’t made the structural changes to improve operational efficiency necessary to see that flow down to the bottom line, says Aderant executive vice president Chris Cartrett, and ‘consequently, the traditional challenges haven’t been resolved even while new challenges like cybersecurity arise to eat at the margins. Law firms should seize this period of economic optimism as an opportunity to challenge the status quo and transform their firm for the future.’