The investment gap gains ground

Independent lawyers and midsize firms need to place higher value on technology and efficiency measures in order to survive the challenges ahead, the latest LexisNexis Bellwether report suggests.

In its second free market research report for 2017, Bellwether Report: Race to Evolve, LexisNexis identifies an investment gap.

A previous Bellwether report found that, while clients identified efficient service as their second most important priority, lawyers mistakenly assumed it would be ranked much lower. This latest Bellwether report explores the issue more deeply. It finds that small and midsize law firms say they value the use of legal processes, tools and technologies to drive efficiency. However, they do not invest highly in these areas. In fact, 81% of these firms spend less than 10% of their turnover on legal tools, and 58% of firms are spending less than 5%.

Jon Whittle, market development director at LexisNexis, said: ‘It’s clear from our research that those firms that are investing are far outpacing those who aren’t, and this isn’t going unnoticed by their clients.

‘While it seems many law firms understand where the gaps are, there is a push and pull phenomenon between traditional and modern working practices, and a disconnect between words and action. Ultimately, while many lawyers are still charging by the hour they are not understanding the value of their time—and this needs to change.’

The lawyers surveyed gave a mixed response when asked what they considered the most important drivers of efficiency in their firms. The frontrunner was ‘not dabbling outside your practice area’ (41%), whereas only 17% said ‘investing in new technology’.

As the report states, however, firms have said that 65% of the enquiries they receive on a regular basis fall outside their main practice areas. Only 9% of lawyers look into them or handle them internally, compared to 95% who refer such enquiries on to other firms.

The full report can be found at http://bit.ly/2gASYQZ.