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Traditional law firms are investing too little in technology and risk falling behind more efficient alternative providers of legal services, a report has claimed.
Small and medium-sized solicitors’ firms are particularly reluctant to spend money on upgrades, even though they recognise the importance of keeping pace with technology.
Researchers found that over 80 per cent of firms outside of the top tier in terms of revenue spent less than 10 per cent of their turnover on technology upgrades. Nearly 60 per cent of small and medium-sized firms spent less than 5 per cent of their annual turnover.
Those figures contrasted with the 92 per cent of lawyers at small and medium-sized firms acknowledging that continued investment in technology was crucial to the success of their practices.
The report found that lawyers in that market had a fairly jaundiced view of their own firms’ efficiency rating. About half classed their efficiency as average, with only 36 per cent claiming a rating of above average.
When asked to cite the most important factor in running an efficient law form, over 40 per cent chose not dabbling in outside core practice areas, while just 17 per cent opted for investing in technology.
“Law firms must align their working practices with those of their increasingly tech-savvy and informed client base,” said Jon Whittle, a director at LexisNexis, the legal research business that produced the report.
“One of the problems is getting lawyers to take a long-term view. While their firms may be thriving now, if they don’t take a commercially savvy, customer-centric, progressive view of the business and invest in solutions that drive efficiency today, this will not be in the case in five years.”