As the new year approaches, what does 2024 hold for law firms and what should they be thinking about?
The legal sector is facing a number of challenges and opportunities in the coming year, as the UK economy, the conveyancing market, the regulatory environment, the technological landscape and the client expectations continue to evolve. Here are some of the key trends that UK law firms should be aware of and prepare for in 2024.
Economic pressures:
The UK economy was volatile in 2023 and this will probably continue in 2024. Rising interest rates and the cost of living have slowed some practice areas. This means clients are now even more price conscious when choosing a law firm. The invasion of Ukraine is one of the factors causing the increased cost of living and inflation. No-one expects the war to stop anytime soon, unfortunately, and knock-on effects seem likely to continue to be felt by the UK economy and legal sector in 2024.
Firms will need to work more efficiently and reduce costs, while maintaining quality and value for their clients. Integrating a case management system with other internal and external systems, such as legal accounting, online payments, website quotation tools, government portals or identity verification services, can provide value to firms and the end client. Moving to a hosted environment can also provide significant security and performance benefits.
Shifting conveyancing market demand:
In 2021 and 2022, the conveyancing sector saw the highest volumes of transactions for over a decade. Leading to the number of residential transactions breaking the one million mark. However, the stamp duty holiday largely drove this. Since then, the conveyancing market has cooled down, and is expected to remain subdued in 2024. Firms will need to adapt to the changing demand and competition, as well as finding ways to differentiate themselves and retain clients. Offering a seamless and transparent online experience, such as online portals, e-signatures, chatbots and instant quotes, can help firms attract and engage clients in the digital age. Firms will also need to keep up with the regulatory changes and compliance requirements. These include the new Quality Scheme for Conveyancing.
Regulatory environment:
The legal sector is subject to various regulations and standards, which are constantly changing and evolving. Firms will need to stay on top of the latest developments and ensure they comply with the relevant rules and codes of conduct. Some of the key regulatory issues that firms will need to consider in 2024 include:
- The new Solicitors Qualifying Examination (SQE), which will be updated in 2024.
- Continued stringent checks for anti-money laundering (AML) and source of funds, especially for transaction work involving Russian clients.
- The new data protection regime, which will replace the EU General Data Protection Regulation (GDPR) and the UK Data Protection Act 2018, and will introduce new rights and obligations for data subjects and controllers.
- The ongoing impact of Brexit, which will affect various aspects of legal practice, such as cross-border litigation, recognition and enforcement of judgments, jurisdiction and choice of law, and legal services trade.
Technological landscape:
What does 2024 hold for law firms in terms of technology? Technology is transforming the way legal services are delivered and consumed. This means that firms will need to embrace the opportunities and challenges that technology brings. Firms will need to invest in and adopt the latest technologies that can enhance their efficiency, productivity, quality, security and client satisfaction. Some of the technologies that firms should consider in 2024 include:
- Artificial intelligence (AI), which can automate and augment various legal tasks, such as document review, contract analysis, due diligence, legal research and prediction.
- Blockchain, which can enable secure and transparent transactions, smart contracts, digital identity and evidence management.
- Cloud computing, which can provide scalable, flexible and cost-effective access to software, data and infrastructure.
- Social media, which is becoming more important in helping firms build their brand, reputation and network, as well as communicate and interact with their clients and prospects.
Client expectations:
What does 2024 hold for law firms in terms of client expectations? Clients are becoming more sophisticated, demanding and diverse, and firms will need to meet and exceed their expectations in 2024. Clients are looking for more than just legal advice, they are looking for solutions, value, convenience and personalisation.
Firms will need to understand their clients’ needs, preferences and goals, and tailor their services accordingly. They will also need to communicate effectively and regularly with their clients, and provide them with clear, concise and relevant information. Firms will need to leverage technology to deliver their services in a fast, convenient and accessible way. They will also need to provide their clients with a seamless and satisfying user experience. Finally, firms will also need to demonstrate their social responsibility and commitment to diversity, inclusion and sustainability. These are increasingly important factors for clients when choosing a law firm.
These are some of the main trends that will define the legal industry in 2024. UK law firms should be thinking about them for the new year. LawWare Ltd. is a leading provider of legal software solutions. We can help you prepare for and adapt to these trends.
Contact us today to find out how we can help you optimise your legal practice and achieve your business goals in 2024.
