1 – The big four accounting firms will become even bigger competition for traditional law firms
In recent years, the big four accountancy firms have developed legal teams with thousands of lawyers. At the rate of progress made by these teams over the last 12 months, they are set to become key players in the legal industry in 2019. These teams will continually invest in the latest technologies and look at everything from hiring practices to operational models as a way to stay ahead of firms.
With the rise of these alternative legal services, traditional law firms will have to look at ways to differentiate and provide more value to their clients. This will see a shift in the way many firms go about business. In the past, they may have been introverted, continuing with the way they practice without looking outside of their immediate competition. However, in 2019, we’ll see traditional firms look to the big four legal teams and make direct comparisons between what they’re delivering and how they are performing. For the first time, we’ll see someone other than the leading firms set the industry practice benchmark.
2 – Industry-specific technology providers will continue to take market share from larger horizontal players
IDC recently predicted that by 2022, 60% of global GDP will be digitised. If this is going to be achieved, enterprises’ digital innovation capabilities must be transformed. This provides a huge opportunity for technology providers to create capabilities that are adapted for industry-specific needs.
While there has been a trend towards vertical “purpose-built” solutions for a while, in 2019, we’ll see more entering the market and more demand among law firms. Over the course of the next year, we’ll see more innovation come into play that solve the specialised requirements of the professional services industries, including legal, in a way that has never been available from traditional horizontal technology providers.
3 – Law firms will accelerate overhauling their pricing models
In recent years, we’ve seen a slight movement away from the billable hour that law firms have traditionally been associated with towards more of a value-based pricing model. This has been facilitated by client needs changing and an emphasis on total transparency when it comes to billable work per hour. However, we’ve recently seen a stagnation here as firms are yet to understand the cost of delivering services, and where savings can be made.
In 2019, we expect that this trend towards value-based pricing will flourish and the firms that will successfully overhaul their pricing model will be the ones that adopt machine learning. In adopting technologies that facilitate automation, firms can free up the time of lawyers, ensuring their time is spent on the higher-level strategic tasks rather than the admin tasks that have traditionally been a core part of the billable hour model.
4 – Firms will need to be more transparent to win over in-house teams
As well as the rise of in-house teams, firms will also have to impress corporate in-house legal teams that they work alongside. This is because corporate legal teams are becoming the epitome of the empowered client as they are well informed about pricing, value, and competitive alternatives, and so will constantly be looking for new ways to engage.
If firms are to retain and win in-house business in 2019, they will need to deliver a modern and transparent experience that can adapt to the needs of the client. Firms will also need to be able to reassure in-house teams that they are working together in a highly secure environment. Corporate legal teams will increasingly look for a business partner in the firm they chose to work with rather than just seeking out basic legal support.
5 – Restless clients will become even more demanding for better service models
At a time of fast-paced digitalisation and change within the legal industry, clients are starting to demand more from their firms. New technological advancements are expected to be adopted by firms to ensure they are offering the best level of service.
With new technologies – and an increase in automated processes – client expectations will grow and they will expect a better and more modern experience from their firm. A new level of collaboration will be introduced, with firms becoming more transparent about their offering. However, this will put mounting pressure on the firm’s service model and ultimately their profitability. New technologies such as automation and AI will be vital to driving these efficiencies and savings across the whole client lifecycle: not just areas of business acceptance like billing and time reporting or other back-office functions, but client development and delivery. With more modern processes in place, this will enable firms to improve client retention and also boost new business opportunities and conversions.
Dan Tacone, President, Intapp where he leads the company’s accounting, consulting, and financial services segments
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Editors Note: We are publishing your Predictions for 2019 throughout January so there is still time to contribute. We accept submissions in any format: text, image, cartoon, infographic, audio or video. We will then publish them on whatever channel is suitable so it could be scl.org, our YouTube channel, as a podcast or in the next issue of the magazine (or a combination of any of them). If written, they can be short or long but I’d suggest that any video or audio submissions are kept reasonably short.
Email your contributions to me at david.chaplin@scl.org. If sending a video or audio file and it is too big to attach, send some form of sharing / download link instead.
