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What are some of the biggest challenges currently facing law firms?

What are some of the biggest challenges currently facing law firms?



One of the favourite questions that interviewers like to ask candidates – and not just at law firms, but at any big company – is about the challenges facing their business. If a candidate can demonstrate that they can identify problems that a company might encounter and display their knowledge of how future events could impact the company, they are likely to be better at finding solutions to these problems, or even better, preventing them before they happen.


In our ever-changing, always-moving world, one of the biggest challenges faced by law firms, whether big or small, is technology. Technological change can undoubtedly positively impact a firm – for example, technology has sped up international communication considerably and automated basic tasks, thus freeing up solicitors’ time for other work. However, since technology changes so fast and there is so much uncertainty about its potential success, it is often hard for law firms to keep up. If companies don’t follow a new technological trend, they risk being left behind. However, if they invest in a new technology that proves to be a hindrance, they lose out. Thus, firms have to perform a difficult balancing act and their choices can impact greatly the company’s progress. In addition, with technology comes the ever-increasing threat of cybersecurity, which law firms have to be particularly sensitive to, given the nature of their work.


Brexit is probably the first thing that springs to mind when you think of a challenge facing law firms in the UK. There is, undoubtedly, a huge amount of uncertainty surrounding the UK’s exit from the EU and law is certainly one of those areas in which it is difficult to predict exactly what will happen until the process occurs. Some of the potential challenges that law firms might face once Brexit comes into action include: clients unwilling to engage with British firms as it will involve extra administrative documentation, and potential tariffs to services and goods that might raise costs. Another major potential consequence of Brexit might be that British-qualified lawyers will be unable to work in the EU, which could affect the amount of transnational work that UK law firms receive in the future.

Competition from non-traditional legal service providers

More and more often, companies that traditionally offer different types of services have been dipping their toes into offering legal services. In addition to a hugely competitive legal market between different law firms themselves, these new businesses entering the market could provide an additional threat to law firms, as their clients may prefer to use two services from the same company together, for convenience. The extra competition provided by these non-traditional legal providers is definitely enough to make law firms consider it a challenge in the coming years.

To bill or not to bill?

Finally, recent events have meant that firms have often considered different billing models to operate their firm. Since the economic downturn, law firms have been under pressure to provide clients with greater value for money and limit their costs, which has led to many firms trying different billing strategies. The idea of ‘billable hours’ (which some firms do use) has often led to a sense of uncertainty on the behalf on the client, which doesn’t have the flexibility for this uncertainty with regard to potentially expensive legal costs. Thus, some firms have tried to improve the predictability of their costs for the client by switching to non-hourly billing strategies.